ORAL ANSWERS TO QUESTIONS

SCOTLAND

The Secretary of State was asked—

International Inward Investment

Mike Freer: What assessment he has made of the potential for international inward investment in Scotland after 2014.

Alistair Carmichael: As part of the United Kingdom, Scotland has an impressive track record of attracting international inward investment, which recent figures have put at its highest level for 16 years. Scotland has strong potential to build on that record as part of the UK, the No. 1 location for Europe-bound foreign investment.

Mike Freer: Does my right hon. Friend agree that inward investment is boosted by Scotland being part of a single market and having a single currency?

Alistair Carmichael: Indeed; I do agree with my hon. Friend. The people of Scotland very much understand that access to the pound sterling as our currency and access to that larger UK market benefit them, and they value them, especially the business community. We know that, because that is why the nationalists are constantly telling us that even in independence we would still be able to keep those things. They are wrong; it is cynical; and as we saw from yesterday’s poll, nobody is really being fooled by it.

Brian H Donohoe: However, it is the case that inward investment is faltering. I have had experience after experience of talking to foreigners who are not investing in Scotland as a result of the uncertainties and the possible likely divorce. Are we not by far better off as a united kingdom than we would be with a separate Scotland?

Alistair Carmichael: We are very much better off as a result of being part of the United Kingdom, and I long for the day when again Ministers here and in Edinburgh can all concentrate on doing their day job of working together to get the maximum benefit to Scotland and
	Scotland’s economy, and jobs for the people of Scotland that come from inward investment—instead of a referendum distraction.

John Thurso: My right hon. Friend will be well aware that marine renewable energy presents a considerable opportunity for inward international investment as well as for export, based on the knowledge we have acquired. In that regard, it is vital that MeyGen’s project goes ahead. What discussions has he had with either the Department of Energy and Climate Change or the Crown Estate to enable that to happen?

Alistair Carmichael: I have had a number of discussions, as I think my hon. Friend is aware, involving my colleagues in DECC and in the Crown Estate. I am very keen to ensure that no procedural difficulties will stand in the way of the development from MeyGen, which, as he and I both know, is a very exciting and potentially lucrative development for his area.

Angus Robertson: Inward investment into Scotland is at a 16-year high under a Scottish National party Government and in the run-up to an independence referendum. That contrasts with all the claims of doom and gloom from the Chancellor of the Exchequer. Given that the UK Government were spectacularly wrong in their claims on inward investment, why should anybody trust the myriad Westminster scare stories?

Alistair Carmichael: I am delighted that the hon. Gentleman gives me the opportunity to remind the House that of the 111 inward investment projects that were successful in 2012-13, 84 were supported by UK Trade & Investment. That is the sort of heft that is given to Scottish business by being part of the United Kingdom; that is what he wants us to walk away from.

Angus Robertson: The UK Government have launched a confrontational approach to the European Union. The Prime Minister went to Brussels last week and was outvoted 26 to 2. If smaller countries have no say in the European Union, why is it that a Luxembourger is the new President of the European Commission—from a country smaller than the city of Glasgow?

Alistair Carmichael: I will take absolutely no lectures from the Scottish nationalists on the subject of confrontational approaches. It really is a mark of the desperation of the position in which they find themselves that that is the best they can come up with.

Anne McGuire: The Secretary of State commented on the Ernst and Young report, and it also identified that although investment was increasing, the number of jobs related to that inward investment was decreasing. I wonder what action the Minister can take, hopefully in co-operation with the Scottish Government, to ensure that there is greater correlation between investment and jobs created in Scotland.

Alistair Carmichael: The right hon. Lady points to a direction in which sensible politics ought to go, and I would love to be working in that way with the Scottish Government. Unfortunately, however, it takes two to tango.

Living Wage

Ann McKechin: What steps he is taking to incentivise employers in Scotland to pay the living wage.

David Mundell: The Government support businesses that choose to pay the living wage, where it is affordable and does not cost jobs.

Ann McKechin: The Minister will be aware that many people in Scotland have started the holiday season and packed their bags, and many will be visiting the beautiful islands of Scotland, but last week the National Union of Rail, Maritime and Transport Workers reported that foreign-resident seafarers who are working on the ferries are being paid as little as £2.35 an hour. That is a disgrace to Scotland, and I urge the Minister to use his offices to work with the Scottish Government to persuade the ferry companies to pay not only the minimum wage but a living wage to every single one of their workers.

David Mundell: I most certainly take on board what the hon. Lady says and I will make representations in that regard. I am sure she welcomes the fact that earlier this month the UK Government published a list of employers who had not paid the minimum wage. Unfortunately, two of them were in Scotland.

Michael Crockart: Mr Speaker, I know that you will be happy to hear that in May I employed an apprentice in business administration in my office and committed to paying her the living wage. Does the Minister agree with me that all MPs’ offices and Government Departments should set an example and move as quickly as possible to being accredited living wage employers?

David Mundell: The hon. Gentleman sets a good example, and certainly in apprenticeship schemes offered by Members of Parliament, I support the action he has taken.

William Bain: Seven out of 10 young people in Scotland who are unemployed are applying for benefit for the second time. Is that not testament to the fact that there are simply not enough secure jobs for them that pay the living wage? Why will this Government and their equally bad counterparts in Edinburgh not use the public procurement powers available to them to ensure that every Scottish young person gets the living wage?

David Mundell: I would have thought that the hon. Gentleman would welcome the fact that the number of those in the 16 to 19-year-old category in Scotland who are out of work has fallen by 4,000. Work is the way out of poverty, and that is what this Government are encouraging.

Robert Halfon: Does my hon. Friend not agree that the best way to achieve the living wage in Scotland and elsewhere in the country is by continuing to take millions of low earners out of paying income tax altogether?

David Mundell: I absolutely agree. Tens of thousands of Scots have benefited from the fact that we have raised the personal allowance. Roughly two thirds of those on the minimum wage are now paying significantly less tax than they were when this Government came to power.

Russell Brown: I know the Minister recognises that payment of the living wage will ease the pressures of the cost of living that many households experience, but in view of his recent admission to the Scottish Parliament’s Welfare Reform Committee that his Government’s benefits sanctions and welfare reforms have contributed to the increase in the number of food bank users, will he now apologise?

David Mundell: What I think politicians should apologise for is making the poor and most vulnerable into political footballs. Poverty is a scourge in our country, not an opportunity for a press release.

Mr Speaker: Order. In case the House is not aware, I can inform colleagues that the House of Commons has received its accreditation from the Living Wage Foundation.

Independence Referendum

Pete Wishart: What steps he is taking to inform the public about the Scottish independence referendum.

Alistair Carmichael: To inform the debate, a variety of information, including a range of detailed analysis papers and a booklet for each household in Scotland, has been published. I have also participated in public debates and will continue to do so to set out the benefits of Scotland’s remaining in the United Kingdom.

Pete Wishart: For which we are eternally grateful, but is not the best way to inform people to debate? Instead, we have the leader of the no campaign, his right hon. Friend the Prime Minister, running a mile, feart to do just that? What about the substitute-designate? It will be a slaughter worse than the Bannockburn re-enactment if they put up the angry, agitated Alistair to debate with the First Minister. The Secretary of State himself could do it; he is good at this stuff—he could even take Rhona with him. But what we really need is the organ grinder, not one of the Alistair monkeys to debate with the First Minister.

Alistair Carmichael: That was pitiful. I cannot believe it sounded good even when the hon. Gentleman rehearsed it in the mirror this morning. It is typical, though, of what we hear from the Scottish nationalists. They are desperate always to talk about how we will debate. They do that only because they want to avoid the actual debate, because they know that the force of argument is on the side of those of us who want to remain in the United Kingdom.

Iain Stewart: Will my right hon. Friend make sure that before 18 September the public have full information at their disposal about the significant extra powers for the Scottish Parliament for which this Parliament has
	already legislated? It is perfectly possible for Scotland to have more autonomy without ripping up our country.

Alistair Carmichael: That is exactly the position. As of next year, as a result of the Scotland Act 2012, the Scottish Parliament will have control over stamp duty land tax and the landfill tax, it will have a borrowing power and, come 2016, it will have the power to set a Scottish rate of income tax. Those are significant tax-raising powers. I want to see us go further on that. Of course, that will require Scotland to decide to remain part of the United Kingdom.

Graeme Morrice: Does the Secretary of State agree that third parties such as businesses and trade unions need to be able to make their voices heard in the referendum debate? Will he join me in condemning those people who continue to intimidate those who speak out against independence?

Alistair Carmichael: I absolutely 100% and without any reservation condemn any intimidation, wherever it may appear. This is by a country mile the single most important issue that we, the people of Scotland, will ever have to resolve for ourselves. Nobody should feel that they are constrained in having their say or asking questions about what it would mean for them, their family or their business. Anybody who tries to silence people on the other side of the debate should be no part of it.

Menzies Campbell: Is not the role of our Government to provide answers to the questions that those arguing for independence refuse to provide—either because they do not know the answer or because they do not want us to know the answer?

Alistair Carmichael: Indeed, that is the case. It has been remarkable that on every occasion when we could have been given hard facts and information by the Scottish Government throughout this exceptionally long campaign, we have instead been given opinion and assertion. People are not stupid, though. They draw their own conclusions from that, as was apparent from yesterday’s YouGov poll in The Times.

Margaret Curran: This is the last Scottish questions before the referendum. People across Scotland know the magnitude of this decision and that if there is a yes vote, it is irreversible. That is why people need as much information as possible. Does the Secretary of State agree that when presented with the facts, most Scots do not want to turn their backs on the United Kingdom, and that a message of a strong Scotland with a strengthened Scottish Parliament is gaining support in every part of Scotland?

Alistair Carmichael: The most important message that the people of Scotland have to get from any source is that the decision we make on 18 September is a decision from which there will be no going back. This has to be a once and for all decision. From that point of view I agree completely with the hon. Lady. Over the past 300 years, as part of the family of nations that is the United Kingdom, we have achieved a great deal of which we should be proud, and I and the people of Scotland do not want to walk away from that.

Margaret Curran: I thank the Secretary of State for that answer, which is particularly important this week, as we celebrate the naming of HMS Queen Elizabeth. Will he ensure that people across Scotland are informed about the value of such UK contracts to the shipbuilding industry in particular? Does he agree with the shop stewards at Rosyth and on the Clyde that the best way to protect the shipbuilding industry in Scotland is to say no thanks in September?

Alistair Carmichael: I absolutely agree with the hon. Lady and with the shop stewards at Rosyth and on the Clyde, all of whom I have met on a number of occasions in recent weeks. They are clear and unambiguous about the message that the hon. Lady has just articulated. The House should remember that that is not the view of a politician; that is the view of trade unionists—people who are charged with protecting the best interests and the jobs of their members. If they thought for a second that independence would be good for their members and that it would help to protect their jobs, I have no doubt that the trade unions on the Clyde and at Rosyth would be supporting it. The fact that they are not tells us all we need to know.

Gerald Howarth: Will the Secretary of State ensure that Scottish voters understand that if they vote for Scotland to become a foreign country, they will lose the pound and all the stability and economic advantage that goes with it? Will he also make it clear that many of us in England—indeed, the vast majority—want Scotland to remain a vital and important part of our United Kingdom so that we can jointly share in our future prosperity?

Alistair Carmichael: I agree with my hon. Friend that that is the view of most people in England, and in Wales and Northern Ireland. I look at how we have tackled the challenges we have faced over the past 300 years, and I see that over that time we have identified the problems and reached out from Scotland, to communities such as Liverpool, Newcastle, Manchester, Cardiff and Belfast, and tackled them by making common cause. That has worked for us, and I believe that it will continue to work for us.

Regional Air Connectivity Fund

Jim McGovern: What assessment his Department has made of the effect of the regional air connectivity fund on Scotland.

David Mundell: The regional air connectivity fund was announced by the Chief Secretary to the Treasury last year and was doubled to £20 million in the Budget. It has already been successful in securing the air link between Dundee and London, a vital support for economic growth in the hon. Gentleman’s great city.

Jim McGovern: I thank the Minister for that answer. Some £2.8 million came from the UK Government to retain the air link between London and Dundee. Is that not just one more example, albeit a crucial one for Dundee, of why Scotland is stronger as part of the UK?

David Mundell: I absolutely agree. The air connectivity fund is a good example of the UK Government working to support economic development across all the nations and regions of our United Kingdom.

Charles Kennedy: May I ask the Minister, on behalf of my hon. Friend the Member for Argyll and Bute (Mr Reid) and myself—this is not just a parliamentary pincer movement; it is close to the Secretary of State’s heart, and I am assured that he does have a heart, at least on Wednesdays—about Islay airport and Broadford airport on the Isle of Skye? They could both benefit if that excellent scheme were extended in conjunction with the Scottish Government: in the case of Islay, because it lacks a public service obligation and wants more commercialism; and in the case of Broadford, by re-establishing passenger links. Will he give that his full support?

David Mundell: I will most certainly take on board what the right hon. Gentleman says on his behalf and that of his colleagues. I am sure that everybody would welcome the opportunity to fly over the sea to Skye.

Ian Davidson: Does the Minister agree that those who are using that fund to fly from London to Dundee later this week in order to see the launch of the aircraft carrier will be able in two different ways to see the strength of the United Kingdom?

David Mundell: Absolutely. The hon. Gentleman will have heard the Secretary of State highlight the importance of the flotation of the aircraft carrier on Friday, which will be a very important moment not only for Scotland, but for our whole United Kingdom.

Energy (Independence)

David Mowat: What assessment he has made of the potential effect of Scottish independence on energy flows between Scotland and the rest of the UK.

Alistair Carmichael: Scotland has a thriving energy sector which benefits from unrestricted access to the integrated Great Britain energy market. That supports jobs, keeps bills lower and spreads the substantial costs over 30 million households and businesses.

David Mowat: The Scottish Government have now decided to generate 100% of electricity from renewables by 2020. The implied subsidy for that is £4 billion a year, or £1,000 per voter a year. Has the Secretary of State had any discussions with the Scottish Government about who would pay for that in the event of independence?

Alistair Carmichael: What I can tell my hon. Friend is that at the moment the cost of the subsidy required for the development of renewables is spread across the whole United Kingdom market. In an independent Scotland, that cost would have to be met by households in Scotland, which would mean a difference of between £38 and £189 in Scottish energy bills. We do exceptionally well from the subsidies that come to Scotland as part of the United Kingdom.

Fiona O'Donnell: Does the Secretary of State think there would be a market in the rest of the UK for expensive renewable energy from an independent Scotland, or is a single regulated energy market best for Scotland and best for the UK?

Alistair Carmichael: The benefits and opportunities that come to generators of renewable energy in Scotland from being part of that single integrated market speak for themselves. The fact that we are being asked to leave that should be of concern to them.

Transition Costs (Independence)

Sheila Gilmore: What discussions he has had with his ministerial colleagues on the transition costs of an independent Scotland.

Alistair Carmichael: I have regular discussions with ministerial colleagues, to ensure that people in Scotland have the full facts about the economic consequences of independence. The Scottish Government have repeatedly refused to publish their own workings. I call on them today to publish the work they have carried out.

Sheila Gilmore: I thank the Secretary of State for that reply. The Scottish Government’s own Finance Secretary calculated, in an internal memo, that the cost of setting up a new tax authority alone would be some £650 million. Is it not right that the Scottish Government should give that and other, similar information they have to the Scottish people before asking them to vote for a pig in a poke?

Alistair Carmichael: It is worth reflecting that that figure is in the public domain only because the document was leaked. The truth of the matter is that, whenever there is any difficult news to be had, the Scottish Government will go to any lengths to suppress it, because, frankly, they are prepared to tell us anything that they think will make us more likely to vote for independence.

Angus MacNeil: With the renovation costs of the Westminster Parliament expected to be £400 million a year every year for 10 long years, Professor Patrick Dunleavy said yesterday at the London School of Economics that the set-up costs for an independent Scotland would be £200 million and not the £1.5 billion that is on the Treasury website. Will the Secretary of State see to it that that figure is corrected and that the Westminster Government apologises both to Professor Dunleavy, an expert in this area for 30 years, and to the people of Scotland for that error and misinformation? [Interruption.]

Mr Speaker: Order. The hon. Gentleman is talking out his colleagues.

Alistair Carmichael: The hon. Gentleman is out of date. I can tell him exactly what Professor Dunleavy said yesterday:
	“Scotland’s voters can be relatively sure that total transition costs over a decade will lie in a restricted range, from 0.4 of one per cent of GDP (£600 million), up to a maximum of 1.1 per cent (£1,500 million). This is a step forward in debate”.
	He was agreeing with Professor Iain McLean and said:
	“I am grateful to Iain for helping to bring it out.”
	The hon. Gentleman should also be grateful.

Housing Benefit

Michael McCann: What assessment he has made of the effects of the distribution of housing benefit in Scotland.

David Mundell: In recent months, I have met every local authority in Scotland to discuss a wide range of issues, including housing benefit.

Michael McCann: A report by my trade union, the GMB, shows that huge sums of housing benefit are paid to company landlords in Scotland. Bearing in mind the Secretary of State’s earlier answer, will the Minister meet me to discuss how we can bring together the UK, Scottish and local governments to ensure that we get best value for housing benefit and that we can create new houses and new jobs, rather than fill the pockets of company landlords?

David Mundell: I would certainly be happy to meet the hon. Gentleman, with a view to convening such a meeting.

Alan Reid: I want to thank the Government for recognising the extra costs of living in remote rural areas and giving councils such as Argyll and Bute extra money to give discretionary housing payments to their tenants. I hope the Government will continue to give extra money to such councils in future years.

David Mundell: The hon. Gentleman will know that I wrote to the Deputy First Minister of Scotland with an offer to executively devolve the power to Scottish Ministers to set the statutory cap on discretionary housing payments in Scotland. That offer has been accepted and we are working constructively with the Scottish Government to take it forward in relation not just to rural areas, but to all councils in Scotland.

Michael Connarty: Will the Minister intervene with the Department for Work and Pensions so that we can have a system where someone who is sanctioned and taken off benefits when they have an appeal does not lose their housing benefit until the appeal is heard? Once the appeal is heard, they get their money back, but they then have the problem of finding that they are in debt to the local council. Can we not have a system that is sensible and fair to people who are sanctioned by the DWP?

David Mundell: I certainly take note of what the hon. Gentleman says, and I would be happy to meet him to discuss it further.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Charlotte Leslie: If he will list his official engagements for Wednesday 2 July.

David Cameron: This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

Charlotte Leslie: A key driver of our welcome economic growth has been investment in new commercial enterprises. Does my right hon. Friend agree that the speedy completion of the Sainsbury’s and Bristol Rovers deal is a key part of Britain’s fight back to prosperity not only in achieving a new stadium for the south-west, but in unleashing hundreds of jobs, affordable housing, business growth and rail infrastructure plans? Will he do all he can to hasten the completion of this Sainsbury’s deal, which is so vital for our economy?

David Cameron: Having visited my hon. Friend’s constituency recently, I know how passionately she feels about this important development. I know that she will be delighted that the judge in question has dismissed the judicial review. We can now hope that this paves the way for the supermarket and the stadium to be built, and I hope that Sainsbury’s will press ahead with that. Not only will this mean a new home for Bristol Rovers, but it will mean more jobs, more growth and better infrastructure for Bristol.

Edward Miliband: It is four years since the Prime Minister announced his top-down NHS reorganisation. Can he tell us whether, since then, the number of people having to wait more than the guaranteed two months for cancer treatment has got better or worse?

David Cameron: The number of people being treated for cancer has gone up by 15%, and we are meeting the key waiting time targets, particularly the waiting time target for accident and emergency, which we met for April, even though the right hon. Gentleman had once again predicted a crisis.

Edward Miliband: That was a very specific question about cancer treatment: I asked whether things had got better or worse. After all, the Prime Minister did this big reorganisation and said things would get better. Macmillan Cancer Support warns that more lives are being put at risk. Cancer Research UK says,
	“This isn’t just a missed target—some patients are being failed”.
	The NHS has missed the target on access to cancer treatment for the first time ever. Is he really telling two of the most respected cancer charities that they are wrong about the target and that things are getting better, not worse?

David Cameron: What I am saying is that we introduced for the first time ever a cancer drugs fund, which is treating 50,000 people. That is what is happening. The number of people being treated for cancer is up 15%. This is all in stark contrast to Wales, where Labour is in charge—[Interruption.] Labour Members all shake their heads, but the fact is that Labour is in charge of the NHS in Wales, and it has not met a cancer target there since 2009.

Edward Miliband: Actually, the Prime Minister is wrong about that. In Wales, more patients start cancer treatment within 62 days than in England. We know why he wants to talk about Wales—because he cannot defend his record in England. Was it not interesting
	that, on the cancer treatment target, he could not pretend things were getting better, but he could not admit things are getting worse? Let us try him on another one: in the four years since his reorganisation, has the number of people waiting more than the guaranteed four hours in A and E got better or worse?

David Cameron: We have met our waiting time target for accident and emergency. Let me tell the right hon. Gentleman exactly how long people are waiting. When the shadow Secretary of State was Secretary of State for Health, the average waiting time was 77 minutes; under this Government, it is 30 minutes. That is what is happening under this Government.
	Let me admit to a mistake, Mr Speaker. I have just said that Labour has not met a cancer treatment target in Wales since 2009. I am afraid I was wrong: it has not met a cancer treatment target in Wales since 2008. Of course, in Wales there is no cancer drugs fund; there has been an 8% cut to the budget; people are dying on waiting lists—and Labour is responsible.
	The right hon. Gentleman asked me to defend my record over the past four years; I will. There are 7,000 more doctors, 4,000 more nurses, over 1,000 more midwives, and we are treating over 1 million more patients a year. Whereas the NHS under Labour had the disgrace of Mid Staffs, we can now see the NHS being properly invested in and properly improving.

Edward Miliband: I will tell the Prime Minister about our record on the NHS: the shortest waiting times ever, more doctors and nurses than ever before and the highest patient satisfaction ever. That is Labour’s record on the NHS. Now, it was a long time ago, but he did not answer the question. It was on a target that he set, on four-hour waits in A and E. Let me give him the figures for his target: before his reorganisation, the number of people waiting more than four hours was 353,000. After his reorganisation, that has risen to 939,000, an increase of 300%. Is that better or worse?

David Cameron: The average waiting time is down by more than half. That is better. But the right hon. Gentleman does not have to listen to me—he can listen to the shadow Health Secretary, who said that this is
	“the best health service in the world.”
	That is what he said. He was quoting the report from the Commonwealth Fund, which is an independent organisation. It ranked the United Kingdom—for the first time, and under this Government—as having the best health service anywhere in the world. It is better than in America, better than in Germany, better than in France, better than in Australia. [Interruption.] He says that is his record, but it has happened only under this Government, and I can tell him why. Mixed-sex wards have been virtually abolished. Infection rates have been halved. A million more patients have been treated. There is a cancer drugs fund for the first time ever. There are more doctors, more nurses, more midwives, more people being treated, and it is official: the best NHS in the world.

Edward Miliband: It is this party that created the NHS, and every time we have to save it from that lot opposite. Once again, the Prime Minister did not answer
	the question. More people are waiting more than four hours in A and E. What about those people whose condition is so serious that they need in a bed in hospital? Can he tell us, since his reorganisation has the number of people waiting more than four hours on trolleys—something he said he would get rid of—got better or worse?

David Cameron: People are waiting less time to get into accident and emergency than they were under the last Labour Government. We remember what that Government gave us: the disgrace of Mid Staffordshire, for which they have never properly apologised. As for what they said about our plans, we have put £12.7 billion extra into the NHS and their view was that that was irresponsible. They oppose reform of the NHS, and we can see the effect in Wales: no reform, no money, longer waiting lists, no targets met and people dying on waiting lists. That is under a Labour Government.

Edward Miliband: The Prime Minister cannot answer any of the basic questions about his own targets in the NHS. I can tell him that the number of people waiting on trolleys for more than four hours has gone up from 61,000 to 167,000 on his watch. He promised that the reorganisation of the NHS would make things better, but it has made them worse: worse on access to cancer treatment, worse on A and E waits, worse on GP access. The NHS is getting worse on his watch, and there is only one person to blame: him.

David Cameron: If the right hon. Gentleman cannot do better than that, even on the NHS, he really is in trouble. Under this Government, millions more patients have been treated. There is a cancer drugs fund for the first time ever. Our health service is ranked officially the best in the world. We know what he would do, because we have heard from the director of policy, who said that no interesting ideas will emerge from Labour’s policy review—that is official—and his guru, Lord Glasman, has come out and said that he has “no vision.” Yesterday he misquoted statistics and got them completely wrong, and the managing director of the factory he was speaking in said that Labour’s policy would be a “bureaucratic nightmare”. I say to the people looking glum behind him, cheer up, folks—it’s only Wednesday.

Jake Berry: It is good to be back, Mr Speaker.
	Cherylee Shennan, a 40-year-old mother, was murdered in Rossendale on 17 March by Paul O’Hara, who was out on licence after having murdered his former partner in 1998. The introduction of Clare’s law or the right to know whether one’s partner has a history of violence—Cherylee did know of her partner’s history of violence—must be backed up by support from the police and the probation service, so that people in such situations know of the dangers that they face and so that we do not see another tragedy like the death of Cherylee.

David Cameron: It is good to see my hon. Friend back in his place. He makes an important point. The introduction of Clare’s law has made a difference because it gives people the right to any information about the potential dangers from a partner. I am pleased that that has been rolled out across the country. He is absolutely
	right that we need to do more with the police, the probation service and the Prison Service to ensure that more warnings are given in more cases.

Diane Abbott: The Prime Minister will be aware of the housing crisis in London, but is he aware of the distinctive contribution of his colleague, the hon. Member for Newbury (Richard Benyon)? Through his £110 million family firm, he has bought up the New Era estate in Hackney. The firm intends to drive up—[Interruption.]

Mr Speaker: Order. The question will be heard. What people think of it is neither here nor there. This is supposed to be a bastion of free speech and the hon. Lady will be heard, however long it takes.

Diane Abbott: Families in Hackney face seeing their rents driven up, eviction and being put on the street. Are the activities of the firm of the hon. Member for Newbury the Prime Minister’s idea of compassionate conservatism?

David Cameron: What I would say to the hon. Lady is that we all know that we need to see more houses being built. We have seen 41,000 affordable starts over the last year and more than a fifth of those have been in London. We need more house building and more houses being provided. We will then see more affordable rents in the social sector and in the private sector.

John Baron: One in three of our nuclear test veterans’ descendants has been born with a serious medical condition. Given that our cross-party campaign seeks recognition and not compensation, including an ex gratia payment by the Government into a charitable fund to help those in need, will the Prime Minister, following our last meeting in April, clear the logjam, recognise the veterans and finally resolve this shameful chapter in our nuclear history?

David Cameron: First, I pay tribute to my hon. Friend, who has campaigned consistently on this issue in the House and outside it. He and I have discussed the matter. I am happy to tell the House that the Government recognise and are extremely grateful to all the service personnel who participated in the nuclear testing programme. We should be in no doubt that their selfless contribution helped to equip the UK with the deterrent that it needs. Following our meeting, I asked my officials to look again at the specific points and arguments that he made. I will come back to him as soon as possible.

Andrew McDonald: Last Saturday, I spoke to my 93-year-old constituent, Keith Ludrecius, who served as a merchant seaman throughout the second world war. He told me that he never thought he would live to see the day in this country when people who are in work still do not have enough money to live on. What does the Prime Minister have to say to Keith? Is it simply that this Tory Government make the rich richer and everyone else poorer, or is it just the inevitable consequence of his long-term economic con?

David Cameron: First, I am very proud to lead a Government who have increased the basic state pension by £15 a week, which will have helped his constituent. On how we help people in work, what we need to do is to create more jobs. We have seen 2 million more private sector jobs under this Government. The second thing that we need to do is to cut people’s taxes. Under this Government, people can earn more than £10,000 before they pay any income tax. That is at the heart of our long-term economic plan and it is working for Britain.

Robert Halfon: The world has seen the tragic and brutal murders of three Israeli youngsters, most probably by Hamas. Will my right hon. Friend give the Israeli Government every possible support at this time? Does he agree that, far from showing restraint, Israel must do everything possible to take out Hamas terrorist networks, and will he give the Israeli Government support in that?

David Cameron: What I say to my hon. Friend, who I know is passionate about these issues, and to everyone in the House, is that this was an absolutely appalling and inexcusable act of terror, and one can only imagine the effect on the families and friends of those poor teenagers, and what happened to them. It is very important that Britain will stand with Israel as it seeks to bring to justice those who are responsible. We also welcome the fact that President Abbas has firmly condemned the abduction and tried to help find those people. As my hon. Friend said, it is important that all security operations are conducted with care so that further escalation is avoided. The people responsible for this should be found and brought to justice.

Jack Dromey: In 2011, the Prime Minister said that waiting lists “really matter”. Why, then, are nearly 3 million people on ever-lengthening waiting lists—the highest number for six years? What does he have to say to Katherine Sinclair, a constituent of mine, who has been waiting in pain for 33 weeks for a hip operation? Does not she “really matter”?

David Cameron: I say to the hon. Gentleman that he needs to look at the figures. The figures show that the numbers of people waiting longer than 18 weeks, 26 weeks and 52 weeks to start treatment—[Interruption.] The shadow Chancellor says they are getting worse, but they are lower today than they ever were when he was sitting in government—lower than at any time. We have the record from yesterday of the Leader of the Opposition using dodgy statistics. Yesterday he claimed that three quarters of the jobs in our country were created in London. That is totally wrong. Have we heard an apology? Have we heard a correction? Does he want to correct the record? He will do anything to talk down the British economy.

Andrew George: The Prime Minister is aware—I have raised this issue with him before—of my long-standing campaign for serious investment in rail services from Penzance, of the independent and Liberal Democrat Cornwall council proposal for a train upgrade and train care centre at Long Rock, and of my 3,000-name
	petition, which I recently delivered to this House in support of that campaign. Will he visit my constituency with his cheque book and a favourable announcement?

David Cameron: I intend to spend a lot of time in my hon. Friend’s constituency between now and the next election, and I believe I will be bringing all sorts of good news for the people of St Ives.

Ian Austin: Germany has three times as many apprentices as the UK, and the number of young apprentices has fallen. Long-term youth unemployment in Dudley is twice the national average, and we will attract secure and better-paid jobs only if we make education and skills our No. 1 priority. Will the Prime Minister make a start by ensuring that every public sector procurement contract provides apprenticeship places?

David Cameron: If the hon. Gentleman looks at the figures for Dudley North, he will find that the claimant count is down by 20% in the last year. He will find that the youth claimant count is down by 21%, and the long-term youth claimant count down by 28% in the last year. The fact is that in the west midlands things are getting better, with more people in work and more jobs being created. He should be celebrating Dudley rather than running it down.

Anne-Marie Morris: The Prime Minister will be aware of the tragic death of my three-year-old constituent Sam Morrish from sepsis while under NHS care. Sam was failed by his GPs, out-of-hours services, the hospital, the primary care trust and the ombudsman. This must not happen again. Will the Prime Minister ensure that the ombudsman’s recommendations are implemented in full and that the systems of review within the NHS, and by the ombudsman, are radically overhauled to deliver proper transparency and accountability in a timely way? That family waited two years for justice.

David Cameron: My hon. Friend is absolutely right to raise that tragic case, and all our thoughts should be with Sam’s parents, who I know have had a meeting with the Health Secretary. It is shocking and saddening, as she says, to see how a whole succession of health services failed that family, and anyone who has lost a child, and lost a child that young, knows how harrowing and how dreadful that experience is. She is absolutely right: we must learn the lessons from that case, and make sure they are acted on and that they cannot happen again. Last week we launched a major safety campaign to prevent those sorts of tragic and—sadly—avoidable deaths.

Kerry McCarthy: At the Tory billionaires’ summer ball, the Defence Secretary was sat with the lobbyist for the Government of Bahrain. Can the Prime Minister tell us whether they discussed the fact that Bahrain is still not regarded by the Foreign Office as a human rights country of concern?

David Cameron: What I think will be discussed is the fact that the Labour party just has to get one trade union to write one cheque for £14 million. When you
	look at the Labour party candidates and take out of the mix the fact that they have got son of Blair, son of Straw, son of Prescott, son of Dromey—when you take out the red princes—you will find that 80% of the candidates are union-sponsored. They have bought the candidates, they have bought the policy, they have bought the leader. We must never let them near the country.

Brian Binley: The number of NEETs in Northamptonshire has fallen from 4,580 in March 2012 to 2,645 now thanks to a joint project set up by the local enterprise partnership and the Northampton Alive organisation. Will the Prime Minister congratulate those responsible for that success, and urge more MPs to get involved with their local LEPs, thus recognising their great value if constituted correctly, led imaginatively and targeted wisely?

David Cameron: My hon. Friend is absolutely right. There is interest in this right across the House. All parties are now committed to making local enterprise partnerships work and to not going back to the old regional development agencies. It is important that LEPs are business-led and it is important they are strong in every part of the country. Members of Parliament can play a real role in encouraging prominent businessmen and businesswomen to get involved with LEPs and in making sure they deliver for local areas.

Jeremy Corbyn: May I take the Prime Minister back to the question of the private rented sector in Britain? Across London, there are thousands and thousands of families—people in work and on benefits—who are frightened of rent increases, frightened of short-term tenancies and frightened of the consequences, for themselves and their children, of being evicted or forced to move out of the area in which they live. What is happening in central London is social cleansing, and it is coming to the rest of the country. Will he give me an assurance that, in addition to any regulation of the agencies, serious consideration will be given to the need to bring back rent control to protect people and ensure they have somewhere secure and decent to live?

David Cameron: Where I would agree with the hon. Gentleman is on the need for greater transparency in the work of letting agents in terms of fees. There is a need for alternative options, which we have put forward, for longer-term tenancies, but in the end we must allow customers to choose what they want. Where I part company with him is on the idea of introducing full-on rent controls. Every time they have been tried, wherever they have been tried in the world, they have failed. That is not just my view; it is also the view of Labour’s own shadow housing Minister, who is on the record as saying that she does not think rent controls will work in practice. Perhaps he might want to have a word with her before coming to me.

Tony Baldry: In the ’83 general election, a 13-year-old boy delivered leaflets around my constituency pledging that Michael Foot would take Labour out of the European Union. Does my right hon. Friend find it strange that that same boy, now leader of the Labour party, is not willing either to support the renegotiation of Britain’s terms of
	membership of the European Union or to pledge to trust the people of Britain in a referendum on our membership of the European Union?

David Cameron: I have always thought it terribly unfair to hold against people things they might have done in their youth. If that was the right hon. Gentleman’s idea of fun as a 14-year-old, then, obviously, we have to make room for everybody. The point is this: it is in the interests of the British people to have a renegotiation. [Interruption.] What is my idea of fun? It is not hanging out with the shadow Chancellor—that is no idea of fun. I feel sorry for the Leader of the Opposition, because he has to hang out with him all the time. What a miserable existence it must be to have sitting next to you the person who wrecked the British economy, and to have to listen to him, day after day, as he says to the British people, “We’re the people who crashed the car, give us the keys back.”

Jim Sheridan: The uncertainty surrounding the future of Scotland and indeed the UK has resulted in many among the business community in Scotland withholding significant investments in that country. Does the Prime Minister therefore agree with me that there is a moral responsibility on employers to inform their employees about the consequences, if any, of the separation of Scotland from the UK so that they can make an informed choice prior to the referendum?

David Cameron: The hon. Gentleman makes a very important point—that a huge amount of pressure is being put on businesses by the Scottish Government with all sorts of threats and warnings against speaking out and saying what they believe is the truth. I come across business leader after business leader—large and small in Scotland—who wants to keep our United Kingdom together and thinks it would be crazy to have border controls, different currencies and split up our successful United Kingdom. Together with the hon. Gentleman, I urge them to speak out, talk with their work forces about the strength of our United Kingdom and then vote to keep it together.

Greg Mulholland: This weekend, the cities, towns and villages of Yorkshire will be alive to cries of “Allez, allez” as the world’s greatest annual sporting event passes through our county. Will the Prime Minister join in people’s enthusiasm for le grand départ this weekend, and does he agree that this is a wonderful way to build a legacy for cycling and encourage more people to “get on their bikes”?

David Cameron: I absolutely agree with my hon. Friend. It is brilliant that the Tour de France is starting in Yorkshire, and I think it will be a fantastic event for our country while also providing a great advertisement for Yorkshire and all that the county has to offer. I am greatly looking forward to going and seeing some of the race and some of the preparations. It is going to be a magnificent event, and I will do everything I can to promote it—apart from wearing lycra.

Susan Elan Jones: Will the Prime Minister make it illegal for recruitment agencies to advertise overseas for jobs in this country, unless they advertise them locally, too—yes or no?

David Cameron: The short answer is yes. That is exactly what we are doing—saying that employment agencies cannot do that; they cannot purely advertise jobs abroad, and we are doing everything we can to stop that.

Adrian Sanders: We have a £12 billion tourism deficit in this country—the deficit generated between people going overseas and people coming here. One reason for that is believed to be our high VAT rates on accommodation and attractions. Will the Prime Minister look at that and ensure that that is not what is driving up that deficit?

David Cameron: My hon. Friend is absolutely right to promote the south-west as a holiday destination. We should do everything we can to help. Obviously, the restoration of the transport links has been vital. It is difficult to have differential rates of VAT on some of these things, but everything we can do to promote the UK as a holiday destination—including, for instance, the brilliant fact that the Tour de France is coming here this weekend—we should do.

Jim Shannon: Cancer Research UK has just launched its new strategy—a focus on tailoring treatment to individuals, which should prove more effective in combating cancer. How will the Prime Minister ensure that the NHS is in a position to enable access to radiotherapy and ensure that cancer drugs are available for all regions of the United Kingdom of Great Britain and Northern Ireland.

David Cameron: The cancer drugs fund has been a huge breakthrough not just in making available drugs but some important treatments, too. I hope that other parts of the United Kingdom will take up what we are doing with the cancer drugs fund. Another thing we can do is to make sure, by working with Genomics England, that we are sequencing genomes as fast as we can so that we can carry out the research necessary to see which cancer drugs will be effective on which patients in accordance with their DNA. This will be the modern way to do tailored medicine, and I am very pleased to say that Britain is well ahead of the pack when it comes to investing in our universities and science base as well as in our NHS.

Mark Pawsey: Jack Gayton and Hannah Fountaine are two young constituents who now own one of the 108 properties in Rugby bought as a result of this Government’s Help to Buy scheme. Does the Prime Minister agree that the fact that Jack and Hannah now enjoy their own home and have made a start on the housing ladder demonstrates this Government’s support for those who want to work hard and get on?

David Cameron: I join my hon. Friend in congratulating his constituents. The Help to Buy scheme is working to get people on to the housing ladder. It is enabling people who do not have rich parents, and who cannot afford a big deposit but can afford a mortgage, to go out and buy the flat or house that they want. We have seen 30,000 people taking advantage of the scheme already, and it has also helped to kick-start investment in housing and raise the level of housing starts in our country.

Dennis Skinner: Is the Prime Minister aware that, as an out-patient, I have to visit a hospital on a regular basis, and hear from the front line about the problems in the health service? The nurses have lost a considerable amount of their real pay, and A and E services are bursting at the seams. Then there is the fact that nearly every hospital in Britain is running into financial difficulties. As a member of the Bullingdon club, is the Prime Minister proud to be surrounded by this wreckage? Remember, it is his legacy, not ours. Stop blaming the Opposition. Get it done, or get out.

David Cameron: I think the picture that the hon. Gentleman paints is completely wrong. Of course more people are going to A and E departments in our country—over a million more people—but we are meeting our targets, and waiting times are down by a half. The hon. Gentleman talks about nurses. There are 4,000 more nurses in our NHS than there were when I first stood at this Dispatch Box, and there are 7,000 more doctors.
	What the hon. Gentleman ought to know is that we have cut the number of administrative staff, the bureaucrats with whom we were left by the Labour party. There are 19,000 fewer of those, which is why we are able to treat more patients with more clinical staff. That is a record of which we can all be proud.

Michael Ellis: It is thanks to our long-term economic plan that £200 million has been allocated to fighting potholes, including £3.3 million for Northamptonshire, much of
	which will be used in my constituency. Does not that infrastructure investment show that it is only the Conservatives who have a plan that puts Britain on the road to recovery, whereas the Labour party would drive the country’s economy off a cliff?

David Cameron: I think my hon. Friend is fully justified in taking a lot of credit for the work that has been done on potholes. He has raised the issue in every forum, including the House, over and over again, which is partly why Northamptonshire received £3.3 million specifically to spend on repairing roads. He will be pleased to know that that is enough to fill in a staggering 62,000 potholes. This is important, because potholes damage people’s cars, motorbikes and cycles when they are on their way to work, and mending them is good for hard-working families.

Chris Ruane: Arthur Jones, a 73-year-old Army veteran from Denbigh in my constituency, went hill-walking in Crete. He has not been seen since 19 June, and his family are frantic with worry. Will the Prime Minister ensure that the Foreign and Commonwealth Office continues its excellent work, and co-operates with the Greek Government to ensure that Arthur is found?

David Cameron: I will certainly do everything I can to help the hon. Gentleman with his constituent. I will have discussions with the Foreign Office about all the consular assistance that is being given, and about anything else that it can do.

Points of Order

Andy Burnham: On a point of order, Mr Speaker. Just now, during Prime Minister’s Question Time, the Prime Minister appeared to suggest that the number of people waiting longer than 18 weeks for an operation had gone down since his reorganisation. I have the figures here. In April 2010, 20,662 people waited longer than 18 weeks. In April 2014, the figure was 29,417. The number has gone up. Do you not think, Mr Speaker, that the Prime Minister might correct the record before he leaves the Chamber?

David Cameron: Further to that point of order, Mr Speaker. I can tell the House and the right hon. Gentleman that the numbers waiting longer than 18, 26 and 52 weeks to start treatment are lower than they were at any time under the last Government. Those are the facts. The Opposition were caught out with dodgy statistics yesterday, and I think that they have just done it again.

Mr Speaker: We will leave that exchange there.

Ian Swales: On a point of order, Mr Speaker. In yesterday’s Finance Bill debate, the hon. Member for Birmingham, Ladywood (Shabana Mahmood) said that the tax gap was £32 billion when the previous Government left office and that it has now gone up to £35 billion. Official Her Majesty’s Revenue and Customs figures show the tax gap was actually £42 billion when Labour left office, so there has been a fall of £7 billion under this Government. I know the Opposition are keen to regain some financial credibility, so I hope the hon. Lady will correct the record and also find time to congratulate this Government on their progress in—

Mr Speaker: Order. May I just say to the hon. Gentleman—and I say it in a cordial spirit—that that was another action replay? We have now had two action replays today, and I must strongly counsel colleagues against raising as attempted, but actually bogus, points of order what are really political points. Otherwise this phenomenon will multiply over the next nine months or so, which is undesirable. The hon. Gentleman has made his point and it is on the record, and we will leave it there—and I am grateful for his nod of assent to my ruling.

Shabana Mahmood: Further to that point of order, Mr Speaker—

Mr Speaker: There is no further to it, because the point has been made and I have left it there.

Angus Robertson: On a point of order, Mr Speaker. Tomorrow is the second anniversary of the tragic Tornado collision when two Tornadoes collided over the Moray firth and three service personnel lost their lives. Yesterday the Ministry of Defence accepted liability for the collision, but it has not updated the House or appropriate parliamentarians on the MOD’s responsibility or answered questions on the service inquiry report, which was published on Monday. The whole situation is frankly disgraceful. What is the best route to
	ensure that the MOD answers to the House, to explain its responsibilities and clarify its liability, and to say when a warning system will be installed in both Tornado and Typhoon aircraft?

Mr Speaker: The response to the hon. Gentleman is twofold. [Interruption.] Order. If a Minister wishes to catch my eye, he or she is perfectly entitled to do so, but the hon. Gentleman raised his point of order, at least ostensibly, with the Chair and therefore perhaps he will rest content with my answer, and the answer is, as I said, twofold. First, it is up to Ministers to decide whether they think an oral statement is required. Secondly, in the absence of an oral statement, it is perfectly open to the hon. Gentleman to seek a debate in this House on the Adjournment. To the best of my knowledge, the hon. Gentleman has not thus far done so, but he might find that he is successful if he does. We will leave that matter there for today.

Toby Perkins: On a point of order, Mr Speaker. I have notified the Justice Secretary of my intention to raise this point of order. Yesterday in Justice questions he claimed that my allegations about the selection process for the south Yorkshire probation service were nonsense and that there was a carefully constructed process of selection and a proper appeal mechanism for those who were not selected. I have here a letter from Angela Tinker, the human resources systems manager at South Yorkshire Probation Trust, to my constituent, Gwen MacDonald, in which she says:
	“There was a random selection process and employee numbers were used to select between NPS”—
	national probation service—“and CRC”, or community rehabilitation companies. It continues:
	“Employee numbers were drawn out of a hat”,
	which confirms exactly the allegations I was making, and also that yesterday the Justice Secretary inadvertently misled the House. Can you, Mr Speaker, let us know how he might have the opportunity to set the record straight?

Mr Speaker: There are two points here. First, everybody takes responsibility for his or her utterances in this House. There is a formal means by which a Minister can correct the record, if he or she judges it necessary to do so, and that is through a statement to colleagues. Secondly—and I say this in all politeness to the hon. Gentleman, as I did to another Member—Members should not use the point of order procedure to continue debate. Although I am greatly flattered by the extent of the powers that hon. and right hon. Members think I enjoy, they sometimes have a somewhat exaggerated notion of what, in practice, I can be expected to achieve. The hon. Gentleman is, I am sure, now an increasingly experienced and discerning fellow. Judging by the broad smile on his face, he knows that he has had a go and he has got it on the record, and he can now go and enjoy his lunch, resting content. We will leave it there.

Conor Burns: On a point of order, Mr Speaker.

Mr Speaker: I hope it is a genuine one. I have known the hon. Gentleman for 25 years and I hope he is not going to let me down.

Conor Burns: We have indeed known one another for 25 years, Mr Speaker. As we were previously involved in politics together, we had a great reverence for this Chamber of Parliament and for hon. Members on all sides telling the truth to it on all occasions. You have correctly identified the mechanism that Ministers who have misled Parliament can use to rectify that. May I ask you what the correct mechanism is for other hon. Members who inadvertently, or deliberately, mislead Parliament?

Mr Speaker: The answer is that a Member can take the opportunity through an intervention or a speech, or through a personal statement, to correct the record if that Member judges it necessary to do so. But we have, in essence, a self-regulating procedure in the House, and the hon. Gentleman, as a keen student of procedure, will recognise the truth of what I have just said. We will leave it there for now, and I am grateful to the hon. Gentleman for not denting my confidence in his tendency to behave properly.

BILLS PRESENTED
	 — 
	Affordable Homes Bill

Presentation and First Reading (Standing Order N0. 57)
	Andrew George, supported by Mr Nick Raynsford, Mr Charles Kennedy, Jeremy Lefroy, Caroline Lucas, Mr Clive Betts, Stephen Gilbert, Mr Mark Williams, Alison Seabeck, Mr Adrian Sanders, Valerie Vaz and Mr Grahame M. Morris, presented a Bill to make provision about the availability of affordable homes; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 5 September, and to be printed (Bill 13).

International Development (Official Development Assistance Target) Bill

Presentation and First Reading (Standing Order N0. 57)
	Michael Moore, supported by Mr Andrew Mitchell, Annette Brooke, Mrs Anne McGuire, Alistair Burt, John Thurso, Mr Tom Clarke, Fiona Bruce, Roger Williams, Hugh Bayley, Jeremy Lefroy and Dr Julian Huppert, presented a Bill to make provision about the meeting by the United Kingdom of the target for official development assistance (ODA) to constitute 0.7 per cent of gross national income; to make provision for independent verification that ODA is spent efficiently and effectively; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 12 September, and to be printed (Bill 14 ).

European Union (Referendum) Bill

Presentation and First Reading (Standing Order N0. 57)
	Robert Neill, supported by Sir Tony Baldry, Guto Bebb, Mr Graham Brady, Sir William Cash, Mr Nigel Dodds, Mr Stephen Dorrell, Jackie Doyle-Price, Dr Liam Fox, Zac Goldsmith, Sir Gerald Howarth and Sheryll Murray, presented a Bill to make provision for the holding of a referendum in the United Kingdom and Gibraltar on the United Kingdom’s membership of the European Union.
	Bill read the First time; to be read a Second time on Friday 17 October, and to be printed (Bill 15).

Self-Build and Custom Housebuilding Bill

Presentation and First Reading (Standing Order N0. 57)
	Jeremy Lefroy, on behalf of Mr Richard Bacon, supported by Nick Herbert, John Mann, John Pugh, Mr Angus Brendan MacNeil, Mr Nigel Evans, Sir Edward Leigh, Jim Fitzpatrick, David Morris, George Freeman, Mr Philip Hollobone and Mr Graham Allen, presented a Bill to place a duty on local authorities to keep a register of individuals and community groups who have expressed an interest in acquiring land to bring forward self-build and custom-build projects and to take account of and make provision for the interests of those on such registers in developing their housing initiatives and their local plans; to allow volume house builders to include self-build and custom-build projects as contributing towards their affordable housing obligations, when in partnership for this purpose with a Registered Social Landlord; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 16).

Health and Social Care (Safety and Quality) Bill

Presentation and First Reading (Standing Order N0. 57)
	Jeremy Lefroy, supported by George Freeman, Sir William Cash, Ann Clwyd, Margot James, Sir Tony Cunningham, Dr Phillip Lee, Sir Malcolm Bruce, Fiona Bruce, Charlotte Leslie, Julian Sturdy and Andrew George, presented a Bill to make provision about the safety of health and social care services in England; to make provision about the integration of information relating to users of health and social care services in England; to make provision about the sharing of information relating to an individual for the purposes of providing that individual with health or social care services in England; to make provision for removing individuals convicted of certain offences from the registers kept by the regulatory bodies for health and social care professions; to make provision about the objectives of the regulatory bodies for health and social care professions and the Professional Standards Authority for Health and Social Care; to make provision about the disposal of cases concerning a person’s fitness to practise a health or social care profession; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 7 November, and to be printed (Bill 17) with explanatory notes (Bill 17-EN).

Mr Speaker: Gosh, the hon. Member for Stafford (Jeremy Lefroy) is a busy bee.

National Health Service (Amended Duties and Powers) Bill

Presentation and First Reading (Standing Order N0. 57)
	Clive Efford, supported by Frank Dobson, Ms Karen Buck, Mr Andy Slaughter, Grahame M. Morris, Diana Johnson, Alison Seabeck, Shabana Mahmood, Steve Rotheram, John Healey, Mr Dennis Skinner and Angela Smith, presented a Bill to re-establish the Secretary of State’s legal duty to provide national health services in England; to amend the provisions of the Health and Social Care Act 2012 relating to Monitor; to repeal the
	regulations made under section 75 of that Act; to make other amendments to the provisions in that Act relating to competition and provision of private health services; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 21 November, and to be printed (Bill 18).

Tenancies (Reform) Bill

Presentation and First Reading (Standing Order N0. 57)
	Sarah Teather, supported by Tessa Munt, Tim Farron, Sir Peter Bottomley, Bob Blackman, Mr Andrew Smith, Sir Andrew Stunell, John Healey, Jeremy Lefroy, Mr Philip Hollobone, Nicola Blackwood and Fiona Mactaggart, presented a Bill to protect tenants against retaliatory eviction; to amend the law on notices requiring possession relating to assured shorthold tenancies; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 28 November, and to be printed (Bill 19).

Control of Horses Bill

Presentation and First Reading (Standing Order N0. 57)
	Julian Sturdy, supported by James Wharton, Mr Philip Hollobone, Mrs Cheryl Gillan, Neil Parish, Jeremy Lefroy, Andrew Percy, Mr Graham Stuart, Ian Swales, David Morris and Caroline Nokes, presented a Bill to make provision for the taking of action in relation to horses which are in public places; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 20).

Mr Speaker: Never was there a more appropriate linkage between name and title.

Local Government (Review of Decisions) Bill

Presentation and First Reading (Standing Order N0. 57)
	Mr Mark Spencer, supported by Chris Heaton-Harris, Simon Kirby, Karl McCartney, Stephen McPartland, Caroline Nokes, Heather Wheeler, John Stevenson and Jackie Doyle-Price, presented a Bill to make provision about the procedure for conducting investigations under Part 3 of the Local Government Act 1974; and to make provision for cases where an authority to which that Part applies takes a decision that affects the holding of an event for a reason relating to health or safety.
	Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 21) with explanatory notes (Bill 21-EN).

Off-Patent Drugs Bill

Presentation and First Reading (Standing Order N0. 57)
	Robert Neill, on behalf of Jonathan Evans, supported by Annette Brooke, Sir Alan Meale, Dame Angela Watkinson, Dr Liam Fox, Robert Neill, John Healey, Glyn Davies, Dr Phillip Lee, Mr Elfyn Llwyd, Mr David Nuttall and Dr Sarah Wollaston, presented a Bill to require the Secretary of State to take steps to secure licences for off-patent drugs in new indications; to require the National Institute for Health and Care Excellence to conduct technology appraisals for off-patent drugs in new indications; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 7 November, and to be printed (Bill 22).

Zero Hours Contracts Bill

Presentation and First Reading (Standing Order N0. 57)
	Ian Mearns, supported by Grahame M. Morris, Ian Lavery, Pat Glass, Steve Rotheram, Mrs Emma Lewell-Buck, Andy McDonald, Kelvin Hopkins, Katy Clark, John Cryer, Jim Sheridan, Mr Dennis Skinner and Mr Ronnie Campbell, presented a Bill to limit the use of zero-hours contracts; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 21 November, and to be printed (Bill 23).

Ronnie Campbell: It’s a good Bill.

Mr Speaker: We are grateful to you, Mr Campbell, for your sedentary interjection.

Low Pay Commission (National Minimum Wage) Bill

Presentation and First Reading (Standing Order N0. 57)
	Dan Jarvis, supported by Margaret Beckett, Stephen Doughty, Jack Dromey, Julie Elliott, Lilian Greenwood, Mike Kane, Mrs Emma Lewell-Buck, Alison McGovern, Mr Jamie Reed, Mr Steve Reed and Alison Seabeck, presented a Bill to require the Secretary of State to set a target for the Low Pay Commission to increase the minimum wage during the term of a Parliament; to require the Low Pay Commission to write to the Secretary of State if this target cannot be met; to require the Secretary of State to ensure that the Low Pay Commission has the power to set up taskforces in certain sectors; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 28 November, and to be printed (Bill 24).

Local Government (Religious etc Observances) Bill

Presentation and First Reading (Standing Order N0. 57)
	Jake Berry, supported by Mr Stewart Jackson, Mr Ben Wallace and Fiona Bruce, presented a Bill to make provision about the inclusion at local authority meetings of observances that are, and about powers of local authorities in relation to events that to any extent are, religious or related to a religious or philosophical belief.
	Bill read the First time; to be read a Second time on Friday 21 November, and to be printed (Bill 25).

Household Safety (Carbon Monoxide Detectors) Bill

Presentation and First Reading (Standing Order N0. 57)
	Andrew Bingham, supported by Tracey Crouch, Dr Philip Lee, Justin Tomlinson, Heather Wheeler, Stephen Phillips, Nick de Bois, Simon Hart, Pauline Latham, Caroline Nokes, Chris Heaton-Harris and Craig Whittaker, presented a Bill to introduce a requirement that a functioning carbon monoxide detector must be installed in all newly built and all rented residential properties; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 12 September, and to be printed (Bill 26).

Under-occupancy Penalty (Exemptions) Bill

Presentation and First Reading (Standing Order N0. 57)
	Yvonne Fovargue, supported by Paul Blomfield, Nic Dakin, Steve Rotheram, Sheila Gilmore, Dan Jarvis, Jenny Chapman, Mrs Mary Glindon, Graham Jones,
	Rosie Cooper, John Healey and Mike Kane, presented a Bill to exempt social housing tenants who claim Disability Living Allowance or who have occupied a property for at least six months or who have not been offered alternative accommodation from the size criteria provisions of the Housing Benefit Regulations 2006, the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 and the Universal Credit Regulations 2013; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 28 November, and to be printed (Bill 27).

Transparency and Accountability Bill

Presentation and First Reading (Standing Order N0. 57)
	John Hemming presented a Bill to make provision regarding arrangements for children involved in court proceedings; to make provision about the transparency, administration and accountability of courts and case conferences; to require the Secretary of State to report to Parliament annually on the number of prisoners who have exceeded their tariff and have not been released because they do not admit guilt; to extend the Criminal Cases Review Commission’s powers to obtain information; to make provision about consumer complaints in markets for public services; to amend certain sections of the Freedom of Information Act 2000 relating to contracts; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 17 October, and to be printed (Bill 28) with explanatory notes (Bill 28-EN).

Control of Offshore Wind Turbines Bill

Presentation and First Reading (Standing Order N0. 57)
	Mr Christopher Chope, supported by Conor Burns, Richard Drax, Mr Tobias Ellwood, Dr Julian Lewis, Mr Robert Syms, Mr Peter Bone, Sir Greg Knight and Mr Nigel Evans, presented a Bill to restrict the height, number, location and operation of wind turbines situated off shore within twenty miles of the coast; to restrict subsidies available for such turbines; to make provision regulating the length, location and environmental impact of cables connecting such turbines to the national grid; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 16 January 2015, and to be printed (Bill 29).

Responsible Parking (Scotland) Bill

Presentation and First Reading (Standing Order N0. 57)
	Mark Lazarowicz, supported by Sheila Gilmore, Mike Crockart, Katy Clark, Dame Anne Begg and Dan Jarvis, presented a Bill to amend Schedule 5 to the Scotland Act 1998 to exclude from the reservations certain provisions relating to parking; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 5 September, and to be printed (Bill 30).

Health Service Commissioner for England (Complaint Handling) Bill

Presentation and First Reading (Standing Order N0. 57)
	Mr David Davis, supported by Mr Dominic Raab, Dr Sarah Wollaston and Alan Johnson, presented a Bill to make provision about the handling of complaints by the Health Service Commissioner for England; to require the Commissioner to notify a complainant of the reason for the delay if the investigation of the complaint is not concluded within a 12 month period; to require the Commissioner to lay before Parliament an annual report giving details of how long investigations of complaints have taken to be concluded and progress towards meeting a target of concluding investigations within a 12 month period; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 5 September, and to be printed (Bill 31).

Pavement Parking Bill

Presentation and First Reading (Standing Order N0. 57)
	Martin Horwood, supported by Mr Jim Cunningham, Tracey Crouch, Kate Green, Mr Elfyn Llwyd, Caroline Lucas, Roger Williams, Lisa Nandy, Richard Fuller, Mike Thornton, Henry Smith and Greg Mulholland, presented a Bill to make provision for the safety, convenience and free movement on pavements of disabled people, older people, people accompanying young children, and other pavement users; to clarify, strengthen and simplify the law relating to parking on pavements in England and Wales; and for connected purposes.
	Bill read the First time; to be read a Second time on Friday 12 September, and to be printed (Bill 32).

Finance Bill
	 — 
	[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee

New Clause 13
	 — 
	Pension flexibility: further amendments

‘Schedule (Pension flexibility: further amendments) makes further provision in connection with pension flexibility.’—(Mr Gauke.)
	Brought up, and read the First time.

David Gauke: I beg to move, That the clause be read a Second time.

Mr Speaker: With this it will be convenient to discuss the following:
	New clause 9—Pension flexibility: Treasury analysis—
	‘(1) The Chancellor of the Exchequer shall, within six months of this Act receiving Royal Assent, publish and lay before the House of Commons any analysis prepared by the Treasury prior to the publication of Budget 2014 relating to the impact of changes made by sections 39 to 43 of this Act to schedules 28 and 29 to the Finance Act 2004.
	(2) The information published under subsection (1) must include—
	(a) any assessment made of the impact of the provision for independent face to face guidance on the 2004 Act;
	(b) the distributional impact, by income decile of the population, of changes made by sections 39 to 43 of this Act;
	(c) a behavioural analysis; and
	(d) the financial risk assessment.”
	Government new schedule 5—Pension flexibility: further amendments.

David Gauke: New clause 13 and new schedule 5 make provision to ensure that individuals who wish to make use of the new pension flexibilities announced by the Government do not face detrimental tax consequences if they take their tax-free lump sum and then defer a decision on how to access the remainder of their pension savings.
	On Budget day, the Government announced radical reforms that will enable people with defined contribution pension savings to have more choice and control over their pension wealth from next April. The greater choice and flexibility that these reforms will give pension savers have been widely welcomed. There has been broad consensus that individuals who have been responsible and saved for their future should be trusted to access their pension savings in the way that most suits them.
	We announced a consultation on the detail of these longer-term proposals, which has now closed. We will publish a response in the near future, and legislation will be brought forward later this year to implement the necessary changes, but the Government wanted to make sure that people who are approaching retirement now would not miss out. As a first step, we introduced clauses 39 and 40 to ensure that individuals nearing retirement this year can benefit from a wider range of
	options before next April. We expect that this will enable around an extra 85,000 people to access their pension wealth as a lump sum this tax year. In addition, 400,000 people will have the option of receiving significantly greater withdrawals from their pension savings, but we did not want to stop there.
	Usually people lose the advantages of a tax-free lump sum if they do not decide what to do with the rest of their pension savings within six months of taking the lump sum. On 27 March, the Government announced that those who had already taken a tax-free lump sum from their defined contribution pension savings, but had not yet secured their pension, would be given more time to decide what they wished to do with the rest of their retirement savings. We also did not think it would be fair to prevent people from taking their tax-free lump sum now simply because they wished to wait to access their pension savings more flexibly from next April, so the Government promised to introduce new provisions in the Bill to ensure that people do not lose their right to a tax-free lump sum if they would rather use the new flexibility this year or next.
	The provisions are technically quite detailed, but their purpose is not. Full pension flexibility for defined contribution savings will be introduced in April 2015, and until that happens we want people to be able to take their tax-free lump sum and to have until October 2015 to make their pension choices without tax consequences. The changes made in new clause 13 and new schedule 5 will enable people to take a tax-free lump sum and to wait until April 2015 to decide how they want to access their pension savings: by transferring the rest of their pension savings to another pension provider to enable them to access them more flexibly; by repaying the lump sum when the scheme that paid it will accept it in order to access the whole of their savings more flexibly; or by receiving the rest of the pension savings as a lump sum under the higher limits that clause 40 provides. Those changes also ensure that people who have the right to receive a tax-free lump sum at an earlier age, or of a larger amount than is normally allowed, can use the new flexibility and keep those rights.
	New clause 13 and new schedule 5 help people who have worked hard to save into a pension, enabling them to take some of those savings tax-free now, and to take advantage of the new flexibilities for the rest of their pension savings.

Cathy Jamieson: I understand that the Minister is trying to introduce an element of fairness into the new arrangements while avoiding unintended consequences. Can he give us some assurances about the time scale for the rules being brought in, and tell us whether he has done additional work to ensure that there are no unintended consequences?

David Gauke: We have been engaged in a consultation process, which closed recently, and have engaged fully with all interested parties more generally on this policy. I will address some of these points when I respond to new clause 9, but we will respond shortly to the consultation, setting out the details of how the policy will be taken forward. This is an important matter, and it is important that we get things right. There are a number of aspects to it, and new clause 9 takes us into some of those aspects that, although perhaps not relevant to the Finance
	Bill, are of significance none the less. I can assure the House that there will be plenty of opportunities to debate the details, given that legislation on the subject will be introduced, as the hon. Lady knows full well.

Ian Swales: The Minister rightly says that on such policy matters, assessments are a normal part of Government practice. Will he confirm that the reviews will take account of any potential future cost to the public purse? For example, what if people have inadequate funds to cover their future care costs, as they have already spent their accumulated pensions, or if they have other recourse to the state because they have inadequate resources later in life?

David Gauke: During the assessment of the policy announced in the Budget, we considered all the various issues, including the consequences for the Exchequer in both the short and long term. We will say more about the specific interaction with social care and so on in the near future. I would make the point that the very people restricted by the old regime were the people who, over the course of their working lives, saved responsibly and ended up with a pension sum that demonstrated their prudent approach to saving. It is not unreasonable to believe that the vast majority of those people will continue to act prudently when given greater flexibility. As a matter of philosophy, both parties in the coalition Government share the view that when we can give more power and responsibility to people, we should do so.

Gregg McClymont: The Minister referred to the Budget and the documents published about this policy, but what was published was merely the estimated tax take for the Treasury. Nothing was published about the behavioural impact, the prospect of mis-selling or the interaction with social care. When I asked the Government via a freedom of information request to reveal the basis on which the policy was made, they refused to do so. Will we get more information as quickly possible about the basis on which the Government reached this policy position? The Minister is right, of course, that annuities need to be reformed, but the question is about the basis on which the policy was made.

David Gauke: On the question of social care, let me repeat the point that I just made: we will respond to the consultation in due course and set out our thinking on that point. As for the issue of mis-selling, we made it very clear on Budget day that it was important to have a guidance guarantee in place. We will set out details of how that will work in the near future, as the consultation period closed only relatively recently. It is important that we get that guidance guarantee right. That brings me to new clause 9.
	New clause 9 would require the Chancellor to publish any analysis of the impact of changes made by clauses 39 to 43 of the Bill to schedules 28 and 29 of the Finance Act 2004. However, as I said in Committee, only clauses 39 and 40, which increase the amount that can be taken as a tax-free lump sum as a draw-down pension from 27 March 2014, make changes to schedules 28 and 29 of the 2004 Act.

Eilidh Whiteford: Before the Minister fully leaves the point about how people might spend the lump sums, one concern that I have had is that people might be tempted to invest in property, for example, which could have the unintended consequence of boosting an already overheating housing market for the next generation. That is still prudent spending from those people’s point of view, but there could be unintended consequences for everyone else. I wonder to what extent that consideration featured in the Government’s thinking.

David Gauke: There are two points to make. First, we believe that individuals should be able to make their own choices. Of course, they should be provided with guidance, but essentially a system that relies on the state telling people precisely what their investment portfolio, as it were, should be is too restrictive, and does not perform the role that we should be performing. As for the systemic effect on the housing market, which was, I think, the hon. Lady’s central point, I do not think that our changes will have any such effect. Both the Governor of the Bank of England and the Chancellor of the Exchequer have made it clear that we need to ensure that we do not return to the bad old days and to the unsustainable housing market boom we saw some years ago. There are measures in place to reflect that, and we have the institutions in place to ensure that if there are problems they can be addressed quickly.

Gregg McClymont: I thank the Minister for giving way once again. Opposition Members become concerned—well, I certainly do—when Ministers refer to the state telling people what kind of investment portfolio to have. Most people have never invested in the way that that comment suggests. He is a well-intentioned and good Minister, but I become concerned when we think about investment for the majority of people in those terms. The fact is that on the day of the Budget the Chancellor said that there would be guaranteed advice, but that turned out not to be the case. It is now guidance, which is a very different thing. Unless we get that guidance absolutely right, there is a danger of the kind of mis-selling that Members on both sides will remember from the 1980s. It is crucial that we understand the way in which people tend to make decisions about these kinds of issues.

David Gauke: I agree that it is vital that we get the guidance right. I am sure the hon. Gentleman will understand that now is not the occasion for the Government to set out the details of how this will operate, but there will come a point when we will do that. There will be plenty of opportunity for the House to debate those matters. I have no doubt that he is looking forward to that opportunity and will scrutinise our policies on this matter with his customary vigour—[Interruption]—as indeed will the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson). While it is very important to get the guidance right, we instinctively support giving people greater flexibility and freedom. Given the tone of the hon. Gentleman’s intervention, I am not sure that he is entirely comfortable with that.

Cathy Jamieson: I understand the point about the timing of the guidance, and I will discuss that in my speech. The pensions Minister has said:
	“Face-to-face, the Chancellor used that phrase, and we will honour that, of course. But if face-to-face means individuals sitting down for an hour with someone every-where in the country, that would be very, very expensive. Face-to-face could involve groups, for example; a lot of the conversation’s generic.”
	Some people may have concerns about what is being referred to in terms of guidance. Will the Minister give us some further information at this stage?

David Gauke: The hon. Lady, perfectly understandably, is seeking more information at this point. I do not think I am being in any way unreasonable in saying that we will set out the details of this in the near future. We are working very closely with interested parties, whether the industry or consumer groups, to ensure that we get this right. We have set out the broad principles behind our guidance guarantee, and we believe that we can deliver something that provides the protection that all Members want.

James Duddridge: I understand the need for a professional to offer guidance face to face and on a quality end-product. However, may I urge my hon. Friend to consider the use of the internet and technology to collect the basic information? It makes no sense for a qualified financial consultant to take one and a half to two hours to do a basic fact-find that is actually about data collection. It is much more efficient to do that on the internet and use the time spent face to face for guidance right at the end of the process.

David Gauke: I am grateful for my hon. Friend’s observation. Without getting too much into the details of what we will announce in due course, it is important to point out that there are various means and methods of delivering guidance and that different people will want different things. We have made it clear that face-to-face guidance will be available for those who want it.

Stewart Hosie: The Minister said that he is discussing this with the industry and other interested parties. I welcome that because, as he will be aware, on the announcement of this plan, the share price of many businesses in the life and pensions field dipped quite sharply with the market discounting what might happen in future. Will he confirm that he is paying attention to ensuring that the life and pensions sector is protected while offering flexibility to people who have saved?

David Gauke: The purpose of the reforms is to ensure that there is a savings and pensions environment that is good for those saving for their pension and those claiming on their pension. We believe that the reforms that we have set out will result in greater innovation in this area. We do not think that the purpose of the rules is to protect particular businesses. Nevertheless, the industry has responded well to our proposals. Many see this as an opportunity to improve the culture of saving and have engaged very constructively with the Government. I hope that that addresses the hon. Gentleman’s concerns.

Ian Swales: I recently met representatives of a major financial institution who rightly see the potential for new products following these changes. I am sure that innovative companies will come up with products that
	meet people’s needs. On advice, will the Minister assure us that the system will be transparent as regards how advisers are rewarded and that we will not get into a situation where overt or covert kick-backs from product providers are the main source of income for those providing the advice?

David Gauke: My hon. Friend is trying to draw me into the details of what we will say about how the guidance will operate. It is important that we have a system that is transparent and maintains the confidence of the general public, and that is at the heart of what we are trying to do.

Gregg McClymont: I will not try to draw the Minister into the details. He rightly refers to the instinct to give people more control over their own lives, and that is something we would all agree with. However, I urge him to read the debates involving a Tory Minister in his position in the 1980s who talked about the revolution in personal pensions using language very similar to that used by the Minister and, more exuberantly, by his colleagues about these reforms. He should compare that with what was said in the 1980s, which led to the mis-selling scandals and some of the loss of confidence in pensions. Greater control, yes, but let us also be aware of the lessons of history.

David Gauke: I take that point in the spirit in which it was offered. I maintain that it is right that we give people greater control and flexibility. This is about ensuring that individuals are in the best position to make the best decisions for them. Guidance is an important part of that, and, from day one, the Government have been very clear that that was the approach we wanted to take. I suspect that there is, at least at some level, a philosophical difference between Members on either side of the Chamber on this point. I do not think that a Labour Government would have brought forward these reforms, but I welcome any extent to which we can have a consensus.

Gregory Campbell: rose—

David Gauke: I will give way once more and then I should return to my speech.

Gregory Campbell: The Minister will be aware that many people are glad that this Government have introduced greater control and flexibility, particularly in pensions. Given that the new individual savings account regime came into force yesterday, will he consider, at a very early stage, introducing flexibility to give people who are saving for their long-term future into retirement—whether through the new ISA or a pension—greater control, particularly as regards spouse-to-spouse transfers?

David Gauke: The hon. Gentleman raises an interesting point. Indeed, I have just signed off a parliamentary answer to one of his questions about this. If I recall correctly, I said that these regimes, in essence, work on an individual basis but matters can be kept under review. I will certainly take his comments as a representation for future reform in this area.
	The clauses I have been talking about increase the amount that can be taken as a tax-free lump sum and as a drawdown pension from 27 March 2014. In addition, the Government’s new clauses and new schedule make changes to schedule 29. As I have explained before, on
	Budget day the Government published a tax information impact note entitled “Increasing pension flexibility”, which covered the impact of the changes set out in clauses 39 and 40. That impact note has been updated to reflect the changes made by new clause 13 and new schedule 5.
	As I have previously said, the changes made by clauses 39 and 40 are likely to be of particular benefit to individuals with smaller pension wealth, including women. The same applies to the changes that would be made by new clause 13 and new schedule 5. That is set out in the tax information impact note that was published on 27 June.
	I have already mentioned that the Government published a consultation, “Freedom and choice in pensions”, on the broader measures announced in the Budget. That document set out the rationale and the relevant analysis behind the Government’s proposals and invited comments on the expected impacts. The consultation will inform the final shape of the Government’s proposals, including the guidance guarantee. The Government will set out further details in their response to this consultation, which will be published shortly.

James Duddridge: I always find terms like “shortly” confusing. Is “shortly” in the next few weeks, in the next the few months or before the next general election? Perhaps, while not giving an exact date, my hon. Friend might hone it down a little finer than the very broad term “shortly.”

David Gauke: I used the word “shortly;” I could have said “in due course,” but I hope that my hon. Friend is more encouraged by “shortly.” He will just have to be a little more patient, but I can assure him that it will not be very long before he will be satisfied on those details.
	Let me say a brief word about guidance, which I have touched on already. The Government believe that, as people have greater choice over retirement, they will need the right support and guidance to make the choice that is right for them, so we are working to ensure that everyone approaching retirement with a defined-contribution pension can receive impartial, face-to-face guidance on the choices available to them. However, the guidance guarantee is not a tax rule, so I hope that hon. Members will understand that although it is a very important part of the radical reforms that we are introducing from April 2015, it does not form part of the changes being discussed today.
	The Government have already published information on the impact of clauses 39 and 40, as well as on new clause 13 and new schedule 5, and have consulted further on their broader proposals. New clause 9 is therefore unnecessary. Whether that is enough to persuade the hon. Member for Kilmarnock and Loudoun not to press her case, I somewhat doubt, and no doubt she will put it very reasonably, but I hope that she considers my response reasonable as well. Whether she considers it reasonable or not, that is my response.
	The overall purpose of the changes that the Government are making today is to enable people who had recently taken the tax-free lump sum from their defined-contribution pension savings to use the new flexibility, while remaining
	in broadly the same tax position. I therefore hope that new clause 13 and new schedule 5 will stand part of the Bill, and I request that new clause 9 is not pressed to a vote.

Cathy Jamieson: I want first to put something on the record. Earlier, the hon. Member for Redcar (Ian Swales) suggested that when the Labour Government left office the tax gap was £42 billion, but the most recent HMRC figures show that in 2009-10 it was £32 billion. I think that addresses the point that he raised yesterday with my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood).
	To return to issues from today’s debate, as I observed in Committee, the amendment that we moved then and the discussion on it addressed some of the most important clauses in the Bill. The Minister suggested yesterday that I could make the most unreasonable things sound reasonable. I think that today he has done a reasonably good job of putting across the Government’s view. However, I would have to say at the outset that he has not said enough to convince me not to press our amendment—he still has time to say something during the debate—and I will explain why.
	As I have said, the reforms provided for in these clauses are very important. Our primary concern in tabling new clause 9 and in pressing it is to ensure that those affected have the information that they need to make an informed choice, because that is very important indeed.
	It is also relevant to recap on what the measures in the Bill would do. First, they will increase the amount that savers can access through trivial commutation, capped draw-down and flexible draw-down. Secondly, those in defined contribution pension schemes can now withdraw more money from their pensions annually, and the threshold at which wealthier savers can have unlimited access to their pension pots has been reduced. Thirdly, for schemes that allow members to take their pension via a draw-down, the capped draw-down limit has been increased from 120% of the amount of an equivalent annuity to 150%. Fourthly, the amount of guaranteed annual income that savers must have to draw down their pensions flexibly has been reduced from the current minimum of £20,000 to £12,000. So, in essence, the rules for accessing pensions have been greatly liberalised with the aim of affording savers increased choice and flexibility.
	In principle, and as my hon. Friend the Member for Birmingham, Ladywood has already said, we do not have a problem with supporting greater choice and flexibility, but we want to ensure that savers are not exploited in any way. That has been a very important principle for us from the outset. Indeed, over the past three years we have consistently advocated reform of the annuities market, and we have called for a cap on pension fund charges. Of course, it would be our view that the Government have delayed the introduction of the charge cap, and this extra year of excess charges will cost a saver with £100,000 up to £750 this year.
	However, to return to the present, our primary concern now is to ensure that savers have access to the information that they need to exercise their new rights judiciously.

Gregg McClymont: On that point, my hon. Friend, as usual, is making an eloquent, precise case. There is an issue not just around informed choice, but around our ability to predict our own longevity; there are substantial issues. The evidence is that it is very difficult for us to predict our own longevity, both for obvious reasons and in terms of biases inherent in our human nature. Therefore, this is not just about choice—although we think that is important—but about how one makes such decisions on one’s own.

Cathy Jamieson: My hon. Friend makes an extremely important point. My understanding of the research is that, when asked to predict their longevity, people significantly underestimate it and do not always predict long enough into the future, particularly when anticipating their potential care needs or support needs. For understandable reasons, people do not want to think of those things during their earlier years, but increasingly they will have to do so.
	I heard the Minister say that some of the issues that have to be dealt with, such as guidance and so on, do not form part of tax law. Of course he is correct on that, but there is an issue about a joined-up approach to government. Already we have concerns—I shall say more if time allows—about how all the Government’s policies on social care and some of the other economic issues that people have to think about will come together. It is important to ensure at every stage that there are no unintended consequences.
	As the Minister accepted, we tabled our new clause, as always, in a spirit of being reasonable and sensible. Indeed, I was a wee bit excited when he seemed to suggest that some of the things we might be saying were worthy of further consideration. Of course, my excitement was short-lived, as he then said that he would not accept our new clause.
	Quite simply, new clause 9 would require the Treasury, within six months of Royal Assent, to publish and lay before the House any analysis it prepared before the publication of Budget 2014 relating to the impact of the changes made in clauses 39 to 43 and the relevant schedules, and that the information published include any assessment made of the impact of the provisions for independent face-to-face guidance on the Finance Act 2004. That is important, because without it, as my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) said in an attempt to elicit information, which has not so far been possible, it will be difficult to scrutinise provisions in a Bill that is to come in due course, shortly, when time permits—whichever one of the time scales so beloved of Ministers is utilised. The new clause also asks that we be provided with information on the distributional impact of the changes by income decile, a behavioural analysis and the financial risk assessment. As our new clause and the points I have made show, our concern about some of the reforms extends to the face-to-face guidance that the Government have committed to providing.
	We discussed this issue extensively in Committee. I think Labour Members made a number of valid and reasonable points on the potential pitfalls for savers who have money at their disposal—those who, perhaps for the first time in their life, have a significant pot of money and have to make a decision. Lest anyone suggest that our concern is patronising or that we are somehow
	not trusting people to decide what to do with, essentially, their own money, let me say that it is important to understand that for many people, having significant pots of money at their disposal will be an entirely new experience at a time in their life when, as we have heard, they may not properly have predicted what resources they are going to need or their own longevity. It is therefore a bit disappointing that the Government have not been able to answer our questions. Looking back over the
	Hansard
	report of the Committee stage, I was struck by the amount of time we spent dealing with some of these questions and, unfortunately, not getting the answers from the Government. Some of the responses we got from Government Members were, I would say, misunderstandings if not misrepresentations of our own position, which led us to believe that the Government might simply not want to engage with those issues.
	To ensure that the Government are held to account, we have set three tests for the pension reforms. The first is the advice test—ensuring that there is robust advice for people who are providing for their retirement and that measures are in place to deal with mis-selling. In Committee, I and others quoted a number of cases brought to us by financial advisers in our local areas and by constituents in which people had been given so-called advice—often, information provided by unregulated people—and had therefore made wrong choices, which cost them significant sums. We do not want that to happen again.

Gregg McClymont: On the question of guidance, the Pensions Minister’s comments about Lamborghinis were particularly unfortunate. Does my hon. Friend agree that the biggest danger is not that hard-working, sensible people will blow their own money, but that they will take it as cash and not invest it because they have no confidence in the financial services industry, so their money will not be working for them? Is not that as big a danger, if not a greater danger, than the Lamborghini sort of stuff the Pensions Minister raised?

Cathy Jamieson: If I did not know better, I would suspect my hon. Friend of having read my speech. I was just about to come to that very point. The infamous Lamborghini comment might have been made in jest, but that sort of joke is entirely lost on those who have already lost their savings because of poor or insufficient advice. My hon. Friend makes a very valid point indeed about people’s confidence in what they can do with their own resources. To an extent, the Government may have begun to acknowledge the need to expand the range of choices available and ensure that consumers have help to navigate those choices—I think that was the phrase used. That sounds pretty sensible and commendable, but we need to make sure that it actually happens.
	The second test we have set is the fairness test—the new system has to be fair to those on low and middle incomes, which means they still should be able to access products that give them the certainty in retirement they want, and the billions we spend in pensions tax relief must not benefit only those at the very top. That is why we have called for restrictions on pensions tax relief for those earning more than £150,000 a year. The third test is the cost test: the Government have to ensure that the policy does not result in extra cost to the state. That
	point was made earlier, and I think the Minister, to his credit, understands that there is an issue with social care and pensioners having to fall back on means-tested benefits—housing benefit, for example—later in their life if they do not properly or sensibly manage their resources. As yet, however, the Government have not explained how all that will be joined up in policy terms. In our view, if the Government’s pensions reforms fail any of those tests, the negative impact on savers could be considerable.
	In Committee, my hon. Friend the Member for Islwyn (Chris Evans) talked about protecting people from the “sharks in the market”. That brings us to the vexed question of guidance. Going back to the Chancellor’s no doubt innocent slip, there is a serious point to be made about definitions. When pressed subsequently, the Chancellor said:
	“There is a technical distinction between advice and guidance. The budget document exists, I don’t get up and read it out because it contains all the technical details of the Budget and we publish it at the same moment. The speech needs to also communicate in English so people watching it can understand what is meant.”
	I understand that, but as I emphasised strongly in Committee, there is a world of difference between advice and guidance in technical terms and in terms of legality. The Government need to deal with that.

Therese Coffey: I am listening carefully and trying to understand. Is the hon. Lady suggesting that the Government should be people’s financial adviser? I am not sure that is what the role of Government should be. I thought the reform was about opening up choices and making sure that people realise what steps they can take, not telling them what direction they should go in.

Cathy Jamieson: It is important that Government use language consistently and do not inadvertently mislead people about what they are going to get, whether it is guidance, advice or information, given face-to-face, over a telephone or through the internet.
	The Red Book states:
	“from April 2015, all individuals with defined contribution pension pots are offered free and impartial face-to-face guidance at the point of retirement”.
	One might consider that a good and positive measure, but it raises some questions—questions that largely accord with the three tests we have set. First, there is a question about cost: the budget for guidance of just £20 million—£10 million each for 2015-16 and 2016-17—gives rise to some concern, as does its including no provision for this year. According to the tax impact and information note, the measures in the Bill will enable up to 400,000 people to draw down their pensions. I note that the Minister referred earlier to an updated tax impact and information note. Perhaps he can tell us whether he has revised any of those sets of numbers. We need to understand why nothing has been put aside for that free and impartial guidance in this financial year.
	My hon. Friends spoke about what people need at the point they make a decision, which was also raised in Committee. People need access to information and guidance
	in advance of drawdown, so we need to consider whether the point of retirement is the sensible time for financial planning.
	Hon. Members will have noted the Government’s proposed allocation of £20 million over the two-year period, but it is questionable whether that will meet the need and the demand. Again, the matter was discussed extensively in Committee, but we did not get the required answers. For example, we are told that the sum is based on an expected cost of £70 to £100 per individual, yet the Association of British Insurers has estimated that 500,000 members of defined contribution pension schemes retire each year. If we take the lower end of the Government’s estimate and multiply it by 500,000, we get a total of £35 million, so there is a question whether the Government’s current budget for guidance would even be sufficient to meet the potential demand at a cost of £70 per head.
	One industry insider, I understand, commented that
	“the £20 million the Government is putting forward is a drop in the ocean”,
	and, of course, the money is available only for the next two years, raising questions about what is supposed to happen after that. A further question is what savers can expect from guidance that costs between £70 and £100 per person. The Association of Professional Financial Advisers, for example, estimates that the average flat fee charged by an adviser for annuities advice—I say advice—is £681. We know that guidance carries none of the legal protections attached to advice, which is regulated. That no doubt accounts in part for the significant difference in cost between the two.
	It is important to note the comments made by the pensions Minister when he appeared before the Work and Pensions Committee on 29 April. He said that the Government’s plan was for 15 minutes worth of guidance per person. In Committee, my hon. Friend the Member for Islwyn, who had significant experience in the financial services sector prior to entering the House, observed that when giving someone independent financial advice, it is not just their pension that has to be looked at, but their investments if they have any, their income, and the right product for them overall. He estimated that that could not be done effectively in less than two hours.
	Advice and guidance are very different, and guidance begins to look less than adequate to meet some people’s requirements. Much confusion arises from the Chancellor’s comments in the Budget speech, which I accept were an innocent slip of the tongue, leading to a number of unintended consequences. We need clarity, not confusion, for people who are making major financial decisions. The pensions Minister told the Select Committee that guidance would
	“lead more people to take formal advice”.
	That has been endorsed by the Royal London insurance company, which said that guidance
	“should be a rich source of referrals to financial advisers.”
	Royal London has illustrated a number of issues in relation to what guidance ought to be and what would be a good practice model. For example, it says that there is a real prospect that many people who receive guidance will find that their needs are more complex than they originally thought, or that they do not know which of the retirement options would best suit their circumstances. There will be people in that category
	who would not normally consider using a financial adviser but who would benefit from advice at that point. That raises the prospect of people being referred on.
	Royal London considered the impact of guidance on debt levels. People approaching retirement who have debt to pay off may need information and support in deciding whether to use some of their pension funds to pay off the debt, and some would require debt counselling. Royal London highlighted the fact that guidance should encourage people to shop around for the best deal, and suggested that after providing advice, providers should not be allowed to approach customers to try to sell their own products for three months. Interestingly, the insurance company suggested that, rather than the issue becoming a political football, guidance would best be provided by a not-for-profit organisation with a single focus. I look forward to hearing the Minister’s comments on those points.
	If guidance is a stepping stone to advice, does that leave the consumer with a considerable additional expense, which could run into hundreds of pounds? If it becomes routine to lead people from free guidance to paid-for advice, what is the point? Another question that we raised in Committee was whether guidance would be available to everyone, regardless of where they live. The Minister acknowledged today that some of the guidance may be made available through the internet, which will not be suitable for everyone and will not be face to face. We need more explanation of the comments of the pensions Minister when he suggested that group sessions were an option worth exploring. Are we to conclude that the Government’s position has moved from face-to-face advice or guidance to face-to-faces advice? I am not sure that many people would want to sit with others to discuss their private circumstances. I hope the Minister will deal with the point about face-to-face guidance, as it is important that people understand what is being offered.

Gregg McClymont: Before my hon. Friend moves off the important topic of guidance, I am sure she will agree that the context to this is that the median pension pot is much smaller than many hon. Members imagine: it is well below £30,000 a year. Moving from guidance to advice potentially means that a significant proportion of a person’s pension pot is eaten up by the cost of advice. We should all bear that in mind during the debate.

Cathy Jamieson: Once again, my hon. Friend makes an important point and anticipates some of the things I want to mention before bringing my remarks to a close. I understand that in some instances pension pots are relatively small, and we do not want a scenario in which people find that a fairly high percentage of their pension pot must be spent on taking the advice to which he refers.
	In that context, I would be particularly interested to know whether the Government have conducted any serious work on how and when savers will invest the money taken out of their pension pots, particularly when those pots are relatively small. Industry analysis from Australia, which has total flexibility at the de-accumulation stage, has found that over half of pension lump sums are spent on homes and cars.
	Again, before people get excited and claim that I am somehow suggesting that people should not be in charge of their own money, let me make it clear that there is not necessarily anything wrong with that. For many people it might seem to be the reasonable thing to do. They might wish to pay off a mortgage or debt, buy the car they had not previously been able to afford, or make improvements to their home. Of course they ought to be able to make that choice, but they ought to be able to do so in the knowledge of what they might face in later years.
	The potential impact of that change on the wider economy has already been mentioned, particularly in relation to the housing market. For example, what are the implications of people with substantial pension pots deciding to invest in property, particularly in the buy-to-let market? I also think that the Government must look at the impact on household savings ratios, given that the OBR has projected that they will fall from 5% in 2013 to just under 3% at the end of the forecast period. In the midst of any economic recovery that has been driven by consumer savings, any change in the way people choose to invest their savings and the consequent impact on the household savings ratio should be looked at very carefully.
	In conclusion, I think that this is a crucial issue for thousands of people across the country. Many people do not think about pensions and long-term savings, and not because they have no interest in them or do not want to save, but because they are trying to manage their expenditure week by week and do not have the opportunity to look at the longer term. Everything we can do to encourage good-quality financial education is important, which is why we must get the guidance and advice absolutely correct. People also need to be confident that the information they get from the industry itself will be tailored and suitable for them.

Gregg McClymont: Perhaps this time I am not anticipating what my hon. Friend is about to say, as I think she is bringing her remarks to a close. It strikes me, having listened to the Government on this issue, that the employer is never mentioned. One arm of the Government is promoting workplace employer pensions, but what is the employer’s role in relation to greater flexibility and choice?

Cathy Jamieson: Once again, my hon. Friend makes a valid and important point. He is correct that I was about to conclude my remarks, so I will resist the temptation to go into great detail on that issue, other than to say—we raised this in Committee—that in some ways there seems to be no joined-up government here, with pensions sometimes seeming to be at odds with other aspects. Rather than all pulling together in the interests of the consumer, there could be tensions, which I think the Government should address.
	As I have said, this is a crucial issue for thousands of people. We need to get it right. I am of course aware that there is further legislation coming down the line. However, given that the Minister indicated that at least some of our requests for information are reasonable and relevant to the matter being discussed, I hope that even at this late stage he will agree to our new clause, which we will want to press when the time comes.

James Duddridge: I find this issue rather exciting, although clearly the House does not, given how empty the Chamber is. The pension changes that the Government are bringing forward are absolutely essential and, I think, will transform the marketplace in the long term. However, I am concerned that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), having suffered the Finance Bill in Committee, seems to have spent the intervening time reading the Hansard reports of what we all said. Really, it is too much of a punishment to do that and then have to come back yesterday and today. Thankfully we will have Third Reading later this evening, if all goes well.
	With regard to new clause 13, my hon. Friend the Exchequer Secretary talked entirely about defined contribution schemes. When he winds up, perhaps he will update the House on what is happening with defined benefit schemes, or perhaps there are no transitional issues for defined benefit schemes in the new clause. I think it is entirely right to give people plenty of time to look at these issues, because a number of people were not expecting these changes and would not have predicted them, so they will need longer to consider their personal positions. As time goes on, I think that there will be less need for guidance and advice, whether provided by the state or privately, because people now going into defined contribution schemes will know what the options are likely to be when they come out. Indeed, five years from now it will be slightly more predictable. People should look at that years, rather than just a few months, before they retire. Of course, that is not possible immediately, given that these changes have only just come in.

Gregg McClymont: The hon. Gentleman will be aware that the other arm of the Government on this, the pensions Minister, has developed a whole pensions policy based on the notion that inertia has to be harnessed for the public good, meaning that, as a rule, people are not aware of the complexities of pensions and there therefore needs to be a system in place so that those who do not exercise a choice still get a good outcome. Is the hon. Gentleman really that confident that we will very quickly reach a situation in which there will be informed consumers across the board who can make the kinds of investment decisions to which he is referring?

James Duddridge: I think that the default position will be that an annuity is purchased, rather than a lump sum being withdrawn. I think the hon. Gentleman is saying that that is the more cautious route, but I am concerned that it is not the right route for some people. Taking out a lump sum might make a lot more sense for them. However, it is an additional option. The guidance that the Government are offering is not perfect. In fact, perfect advice, if it is taken forward to a recommendation, is incredibly expensive.

Gregg McClymont: I thank the hon. Gentleman for that thoughtful response. I am not sure that the default position will be that someone is defaulted into an annuity. We need clarity on that as we discuss these clauses. I think that a choice will have to be exercised one way or another, but I might be wrong. Perhaps the Minister will provide clarity on that.

James Duddridge: The Minister, as ever, will provide clarity, and I will ensure that he has plenty of time to do so.
	We need to look at these changes in the round and consider other changes being made, particularly the individual savings account legislation that is going through. In the longer term, I think that ISAs and pensions will be linked and that we will move towards the individual retirement accounts we see in America, but working more from the base of an ISA up to a pension, rather than a merging of the two or a dumbing down of pensions.
	An earlier intervention referred to spouse-to-spouse transfers on ISAs, which I think are particularly relevant in relation to new clause 13 and defined contribution pensions, because some people will be taking larger sums of money out and investing them directly into an ISA with little awareness that it cannot then be transferred to their spouse. The earlier the Government look at making spouse-to-spouse transfers exempt for inheritance tax, the better, particularly during this early transition period. The Sunday Times and a number of other financial services campaigners are urging the Government to look at the issue of spouse-to-spouse transfer, but I have not heard it mentioned with regard to the release of lump sums and defined contribution lump sums. Through new clause 13 the Government are recognising that there are transitional issues, but the additional transitional issue relating to ISAs has not necessarily been covered.
	I welcome the reduction from £20,000 to £12,000, which entrusts individuals to make decisions. Changes to trivial contributions are also very welcome, particularly as people move from employer to employer, building up large numbers of very small pots. It may not make financial sense to merge them, so it may be better to take them out of a pension tax wrapper and independently move them to an ISA.
	On the issue of guidance, we should be open and honest that the Government cannot afford to provide full-blown advice and recommendation. It is very good of the Government to allocate a significant sum of money to pointing people in the right direction. If the average pot is £30,000, as we have heard, the thousands of pounds that full-blown advice and recommendation may cost would be totally disproportionate to the potential benefit.
	It is good to get guidance, but I would exercise caution about what is best: face-to-face guidance is not always the best option. If I wanted to transfer money or enact a financial transaction, I would not want to sit down face to face with my bank manager. I would much prefer the tried and tested method of interacting with and getting advice and guidance through the internet, at least at an early stage. I would not want the Government spending all the money on face-to-face guidance. Guidance on the internet may well be better for an increasing number of people, including a mini fact find into which they put their basic information.
	The change may be from face-to-face to face-to-faces. Financial services presentations can work face to face, but they can also work over the internet. Once people have completed an initial fact find or an overview of their financial position—they may want to use their
	lump sum to repay debt, for instance—they could be diverted to an individual web cast with the relevant financial guidance.

Gregg McClymont: I thank the hon. Gentleman, who is speaking from his experience of the sector, for giving way again. Would he care to comment on why the existing annuities market was not working? My understanding of the analysis is that the default position of individuals was simply to accept what they were offered and not to get involved in the type of process to which he refers. If that means that the annuities market was a failure because people were not getting value for money as a result of not shopping around, what confidence does he have that there will be an overnight revolution in people’s engagement with the type of guidance he suggests?

James Duddridge: The annuities market was not working effectively in a number of ways, but, in relation to the lump sum, it did not work for a lot of our constituents if they rationally expected a very low life expectancy. If they had been diagnosed with a particular illness, the question of what would happen to their money would cause them great stress. It is important, therefore, to enable them to release some of that pension money and put it into another instrument so that their family can share it or, indeed, so that they can enjoy it themselves in their final years. I understand there is a risk of people under-predicting their longevity, but the large number of people with a diagnosed illness would like to access that pot. That is a slightly extreme position, but it is at the other end of the scale.

Eilidh Whiteford: The hon. Gentleman is making a very good point about encouraging people to shop around, but is he aware that many parts of these islands do not have very good internet access, so putting all the eggs in that basket will not help many people who want pensions advice?

James Duddridge: I agree that we should not put all the eggs in one basket, but we certainly should not put none in the internet basket. It is a very useful provision and, as public and domestic access to broadband improves throughout the islands, I think that use of the internet will speed things up.
	I find it odd that so much of our discussion about this Finance Bill, which is a Treasury matter, has been about pensions Bills. The hon. Member for Kilmarnock and Loudoun has prayed in aid the pensions Minister’s submission to the Department for Work and Pensions. I wonder whether we conduct our debates on Finance Bills in the right way, structurally speaking, and whether other departmental Ministers should be involved, where relevant, alongside Treasury Ministers. Fundamentally, the report supported by Opposition Members almost amounts to a fundamental review of a number of issues in the pensions industry, which is clearly in the remit of the DWP, not the Treasury. I am not arguing that it is wrong or right; it is just that not all the key players are involved.

Anne Begg: I have some sympathy with what the hon. Gentleman is saying about the fact that these pensions provisions are being handled by the Treasury. Does he agree that the two pensions Bills announced in the Queen’s speech appear
	to pull in different directions? One is about giving people more control over their money, while the other is about collective direct contribution schemes, which are the opposite of that. That could lead to a conflict, because two Departments are involved in developing the policy.

James Duddridge: I do not believe they are contradictory, because some people want to hand over that level of responsibility.
	I know that other Members want to speak. I wanted to make a number of other points, but I will sit down and leave it at that in order to give the Minister a chance to respond.

David Gauke: Let me quickly try to address some of the points that have been raised, many of which related to guidance. As I said earlier, the issue features in Labour’s new clause 9, but it is not directly related to the Finance Bill. I will be as helpful as I can. On the question of whether guidance will only be face to face, the face-to-face offer will be available to those who need and want it. However, that is not to say that it will be the exclusive delivery channel. Not everyone will want face-to-face guidance, as my hon. Friend the Member for Rochford and Southend East (James Duddridge) has made clear. For many people, both now and in the future, other channels will better suit their needs. We are currently considering the appropriate range of options for delivery channels, to ensure that consumer needs are properly understood and met, building on the views and evidence received during the consultation. We have asked the Financial Conduct Authority, working closely with the Pensions Regulator, the Pensions Advisory Service, the Money Advice Service and consumer groups, to co-ordinate a set of clear and robust standards that the guidance will have to meet.
	The point was made about costs and, in particular, the £20 million funding. It is important to realise that that is a development fund for the purpose of getting the initiative up and running; it is not to pay for the ongoing costs of the scheme. We will talk more about that later.

Sheila Gilmore: Does not that illustrate the need for gathering and publishing the information, as proposed by our new clause 9? We are constantly hearing new things, such as, “There will be more costs for guidance, but we don’t know what they are or what will happen.” If the information is going to be gathered anyway, as the Exchequer Secretary constantly assures us, why not publish it to make sure we get this right?

David Gauke: I do not know whether the hon. Lady was present earlier—[Interruption.] I am pleased that she was. She will have heard me say that we have consulted on this matter and will respond shortly. If I may provide a little more clarity, that will happen before the summer recess, so it is at that point that we will set out our proposals and, obviously, there will be an opportunity over the months ahead for the House to give them considerable scrutiny.
	To address the particular point made by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) about whether the numbers in the tax information and
	impact note have been changed, the answer is no. The TIIN has been amended to take account of the Government new clause and new schedule, but the impacts remain the same, so there is no fiscal cost. I hope that that clarification is helpful.
	Lastly, to be clear about the guidance—we will get the full details on it—as we have said throughout, it will be impartial and will not include recommendations for specific products or providers. It will not be a sales process; it is important that the sales process is separate.
	I hope that that information is helpful to the House. I hope that new clause 13 can be added to the Bill, and I advise my hon. Friends to oppose the Opposition’s new clause 9.
	Question put and agreed to.
	New clause 13 accordingly read a Second time, and added to the Bill.
	Proceedings interrupted (Programme Order, 1 July).
	The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 9
	 — 
	Pension flexibility: Treasury analysis

‘(1) The Chancellor of the Exchequer shall, within six months of this Act receiving Royal Assent, publish and lay before the House of Commons any analysis prepared by the Treasury prior to the publication of Budget 2014 relating to the impact of changes made by sections 39 to 43 of this Act to schedules 28 and 29 to the Finance Act 2004.
	(2) The information published under subsection (1) must include—
	(a) any assessment made of the impact of the provision for independent face to face guidance on the 2004 Act;
	(b) the distributional impact, by income decile of the population, of changes made by sections 39 to 43 of this Act;
	(c) a behavioural analysis; and
	(d) the financial risk assessment.”—(Cathy Jamieson.)
	Brought up.
	Question put, That the clause be added to the Bill.
	The House divided:
	Ayes 241, Noes 295.

Question accordingly negatived.

New Schedule 5
	 — 
	Pension flexibility: further amendments

Temporary extension of period by which commencement lump sum may precede pension
	1 In Schedule 29 to FA 2004 (authorised lump sums under registered pension schemes) after paragraph 1 (conditions for a lump sum to be a pension commencement lump sum) insert—
	“1A (1) Paragraph 1(1)(c) is to be omitted when deciding whether a lump sum to which this paragraph applies is a pension commencement lump sum.
	(2) This paragraph applies to a lump sum if—
	(a) the sum is paid in respect of a money purchase arrangement,
	(b) the sum is paid before the member becomes entitled to the sum,
	(c) either—
	(i) the sum is paid on or after 19 September 2013 but before 6 April 2015, or
	(ii) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the pension in connection with which the sum is paid, and on or after 19 March 2014 the contract is cancelled, and
	(d) the member becomes entitled to the sum before 6 October 2015.
	(3) Where—
	(a) a lump sum to which this paragraph applies is a pension commencement lump sum but would not be a pension commencement lump sum if sub-paragraph (1) were omitted, and
	(b) the lump sum is paid to the member in connection with a pension under the scheme to which it is expected that the member will become entitled (“the expected pension”), no lump sum paid to the member out of the expected-pension fund is a pension commencement lump sum; and here “the expected-pension fund” means the sums and assets that from time to time represent the sums and assets that, when the lump sum mentioned in paragraph (a) was paid, were held for the purpose of providing the expected pension.
	(4) For the purposes of sub-paragraph (2), if the circumstances are as described in sub-paragraph (2)(c)(ii), the member is treated as not having become entitled to the arranged pension as a result of the cancelled contract having been entered into; and here “the arranged pension” means the pension that would have been provided by that contract had it not been cancelled.”
	Temporary relaxation to allow transfer of pension rights after lump sum paid
	2 (1) In Schedule 29 to FA 2004 after paragraph 1A insert—
	“1B (1) When deciding whether a lump sum to which this paragraph applies is a pension commencement lump sum—
	(a) paragraph 1(1)(aa) and (c) and (3) are to be omitted,
	(b) paragraph 1(4) is to be treated as referring to the actual pension (see sub-paragraph (2)(h) of this paragraph), and
	(c) paragraph 2(2) is to be treated as referring to the arrangement under which the member was expected to become entitled to the expected pension (see sub-paragraph (2)(b) of this paragraph).
	(2) This paragraph applies to a lump sum if—
	(a) the sum is paid in respect of a money purchase arrangement,
	(b) the sum is paid to the member in connection with a pension under a registered pension scheme to which it is expected that the member will become entitled (“the expected pension”),
	(c) the expected pension is income withdrawal, a lifetime annuity or a scheme pension,
	(d) the sum is paid before the member becomes entitled to the expected pension,
	(e) either—
	(i) the sum is paid on or after 19 September 2013 but before 6 April 2015, or
	(ii) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the expected pension, and on or after 19 March 2014 the contract is cancelled,
	(f) the sum is not repaid at any time before 6 October 2015,
	(g) before the member becomes entitled to the expected pension, there is a recognised transfer of the sums and assets that immediately before the transfer represent the sums and assets that when the sum was paid were held for the purpose of providing the expected pension,
	(h) the member becomes entitled before 6 October 2015 to a pension under the scheme to which the recognised transfer is made (“the actual pension”),
	(i) the actual pension is income withdrawal, a lifetime annuity or a scheme pension, or some combination of them, and
	(j) all of the sums and assets that represent the sums and assets transferred by the recognised transfer are used to provide the actual pension.
	(3) If a lump sum to which this paragraph applies is a pension commencement lump sum, any lump sum paid—
	(a) to the member,
	(b) by the scheme to which the recognised transfer mentioned in sub-paragraph (2)(g) is made or by any other registered pension scheme (including the scheme from which the transfer was made), and
	(c) in connection with the member’s becoming entitled to the actual pension,
	is not a pension commencement lump sum.
	(4) For the purposes of sub-paragraph (2), if the circumstances are as described in sub-paragraph (2)(e)(ii), the member is treated as not having become entitled to the expected pension as a result of the cancelled contract having been entered into.”
	(2) In section 166(2) of FA 2004 (time at which a person becomes entitled to a lump sum)—
	(a) before paragraph (a) insert—
	“(za) in the case of a pension commencement lump sum to which paragraph 1B of Schedule 29 applies (certain sums paid before 6 April 2015), immediately before the person becomes entitled to the actual pension (see paragraph 1B(2)(h) of that Schedule),”, and
	(b) in paragraph (a) for “of a” substitute “of any other”.
	Temporary relaxation to allow lump sum to be repaid to pension scheme that paid it
	3 In Chapter 3 of Part 4 of FA 2004 (payments by registered pension schemes) after section 185I insert—“
	Repayments of lump sums
	185J Effect of repayment of certain pre-6 April 2015 lump sums
	‘(1) For the purposes of this Part—
	(a) a lump sum to which this section applies is treated as never having been paid, and
	(b) the payment by which it is repaid is treated as not being a payment.
	(2) This section applies to a lump sum if—
	(a) the sum is paid by a registered pension scheme to a member of the scheme in respect of a money purchase arrangement,
	(b) the sum is paid to the member in connection with a pension under the scheme to which it is expected that the member will become entitled (“the expected pension”),
	(c) the expected pension is income withdrawal, a lifetime annuity or a scheme pension,
	(d) the sum is paid before the member becomes entitled to the expected pension,
	(e) either—
	(i) the sum is paid on or after 19 September 2013 but before 6 April 2015, or
	(ii) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the expected pension, and on or after 19 March 2014 the contract is cancelled,
	(f) before the member becomes entitled to the expected pension, the member repays the sum to the pension scheme that paid it, and
	(g) the repayment is made before 6 October 2015.
	(3) For the purposes of subsection (2), if the circumstances are as described in subsection (2)(e)(ii), the member is treated as not having become entitled to the expected pension as a result of the cancelled contract having been entered into.”
	Calculation of “applicable amount” in certain cases
	4 In paragraph 3 of Schedule 29 to FA 2004 (pension commencement lump sums: applicable amount) after sub-paragraph (8) insert—
	“(8A) Sub-paragraphs (1) to (8) have effect subject to the following—
	(a) if—
	(i) paragraph 1A or 1B applies to the lump sum,
	(ii) the lump sum is paid more than 6 months before the day on which the member becomes entitled to it,
	(iii) a contract for a lifetime annuity is entered into to provide the pension in connection with which the lump sum is paid, and
	(iv) on or after 19 March 2014 the contract is cancelled,
	the applicable amount is one third of the annuity purchase price that would have been given by sub-paragraphs (4) to (5) in the case of that annuity had the contract not been cancelled, and
	(b) if—
	(i) paragraph 1A or 1B applies to the lump sum,
	(ii) the lump sum is paid more than 6 months before the day on which the member becomes entitled to it, and
	(iii) paragraph (a) does not apply,
	the applicable amount is one third of the sums, plus one third of the then market value of the assets, held at the time the lump sum is paid for the purpose of providing the pension at that time expected to be the pension in connection with which the lump sum is paid.
	(8B) For the purposes of sub-paragraph (8A)(a)(ii), the member is treated as not having become entitled to a pension as a result of the cancelled contract having been entered into.”
	Expected pension commencement lump sums treated as trivial commutation lump sums
	5 (1) In section 166(1) of FA 2004, in the lump sum rule, omit the “or” after paragraph (f), and after paragraph (g) insert “, or
	(h) a transitional 2013/14 lump sum.”
	(2) In Schedule 29 to FA 2004, after paragraph 11 insert—
	“Transitional 2013/14 lump sum, and its related trivial commutation lump sum
	11A (1) A lump sum is a transitional 2013/14 lump sum for the purposes of this Part if—
	(a) the sum (“the earlier sum”) is paid to the member in connection with a pension under a registered pension scheme to which it is expected that the member will become entitled (“the expected pension”),
	(b) the earlier sum is paid before the member becomes entitled to the expected pension,
	(c) either—
	(i) the earlier sum is paid on or after 19 September 2013 but before 27 March 2014, or
	(ii) the earlier sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the expected pension, and on or after 19 March 2014 the contract is cancelled,
	(d) all of the sums and assets for the time being representing the sums and assets that when the earlier sum was paid were held for the purpose of providing the expected pension are, before the member becomes entitled to the expected pension, used in paying a further lump sum to the member (“the further sum”),
	(e) the further sum is paid on or after 6 July 2014 but before 6 April 2015, and
	(f) the further sum is a trivial commutation lump sum (see sub-paragraph (2)).
	(2) Sub-paragraph (4) applies when deciding under paragraph 7 whether the further sum is a trivial commutation lump sum in a case where the earlier sum is paid before the nominated date (see paragraph 7(3) for the meaning of “the nominated date”).
	(3) If the earlier sum is a transitional 2013/14 lump sum, and the earlier sum and the further sum are not the only lump sums paid under registered pension schemes to the member, sub-paragraph (4) applies when deciding under paragraph 7 whether any other lump sum paid under a registered pension scheme to the member is a trivial commutation lump sum.
	(4) If this sub-paragraph applies, the payment of the earlier sum is to be treated for the purposes of paragraph 8(1)(b) as a benefit crystallisation event—
	(a) which occurs when the earlier sum is paid, and
	(b) on which the amount crystallised is the amount of the earlier sum.
	(5) If the earlier sum is a transitional 2013/14 lump sum, and only the sums and assets mentioned in sub-paragraph (1)(d) are used in paying the further sum, section 636B of ITEPA 2003 applies in relation to the further sum with the omission of its subsection (3).
	(6) If the earlier sum is a transitional 2013/14 lump sum, and the sums and assets mentioned in sub-paragraph (1)(d) are used together with other sums and assets in paying the further sum—
	(a) section 636B of ITEPA 2003 applies in relation to the further sum as if instead of the further sum there were two separate trivial commutation lump sums as follows—
	(i) one (“the first part of the further sum”) consisting of so much of the further sum as is attributable to the sums and assets mentioned in sub-paragraph (1)(d), and
	(ii) another consisting of the remainder of the further sum,
	(b) the first part of the further sum is to be treated for the purposes of section 636B of ITEPA 2003 as having been paid immediately before the remainder of the further sum,
	(c) section 636B of ITEPA 2003 applies in relation to the first part of the further sum with the omission of its subsection (3), and
	(d) for the purposes of applying section 636B(3) of ITEPA 2003 in relation to the remainder of the further sum, the rights to which the first part of the further sum relates are to be treated as rights that are not uncrystallised rights immediately before the remainder of the further sum is paid.
	(7) For the purposes of sub-paragraph (1), if the circumstances are as described in sub-paragraph (1)(c)(ii), the member is treated as not having become entitled to the expected pension as a result of the cancelled contract having been entered into.”
	(3) In section 636A of ITEPA 2003 (income tax exemption for certain lump sums)—
	(a) in subsection (1) after paragraph (c) insert—
	“(ca) a transitional 2013/14 lump sum,”, and
	“transitional 2013/14 lump sum”,”.
	(4) In section 280(2) of FA 2004 (index of expressions) at the appropriate place insert—
	
		
			 “transitional 2013/14 lump sum paragraph 11A of Schedule 29”. 
		
	
	Small pot lump sums
	6 (1) In the Registered Pension Schemes (Authorised Payments) Regulations 2009 (S.I.2009/1171) after regulation 3 insert—
	“3A (1) This regulation applies to a lump sum if—
	(a) the sum (“the earlier sum”) is paid under a registered pension scheme to a member of the scheme,
	(b) the earlier sum is paid to the member in connection with a pension under a registered pension scheme to which it is expected that the member will become entitled (“the expected pension”),
	(c) the earlier sum is paid before the member becomes entitled to the expected pension,
	(d) either—
	(i) the earlier sum is paid on or after 19 September 2013 but before 27 March 2014, or
	(ii) the earlier sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the expected pension, and on or after 19 March 2014 the contract is cancelled,
	(e) all of the sums and assets for the time being representing the sums and assets that when the earlier sum was paid were held for the purpose of providing the expected pension are, before the member becomes entitled to the expected pension, used in paying a further lump sum to the member (“the further sum”),
	(f) the further sum is paid on or after 6 July 2014 but before 6 April 2015, and
	(g) either—
	(i) the payment of the further sum is a payment described in regulation 11, 11A or 12, or
	(ii) the further sum is a trivial commutation lump sum within paragraph 7A of Schedule 29 and the earlier sum is the pension commencement lump sum in connection with which the further sum is paid.
	(2) If this regulation applies to the earlier sum, and the payment of the further sum is a payment described in regulation 11, 11A or 12—
	(a) the payment of the earlier sum is a payment of a prescribed description for the purposes of section 164(1)(f), and
	(b) section 636A of ITEPA 2003 (exemption from income tax for certain lump sums) applies in relation to the earlier sum as if the earlier sum were a pension commencement lump sum.
	(3) When deciding for the purposes of this regulation whether the further sum is a trivial commutation lump sum within paragraph 7A of Schedule 29, sub-paragraph (2)(c) of that paragraph is to be omitted.
	(4) If this regulation applies to the earlier sum, and only the sums and assets mentioned in paragraph (1)(e) are used in paying the further sum, section 636B of ITEPA 2003 applies in relation to the further sum with the omission of its subsection (3).
	(5) If this regulation applies to the earlier sum, and the sums and assets mentioned in paragraph (1)(e) are used together with other sums and assets in paying the further sum—
	(a) section 636B of ITEPA 2003 applies in relation to the further sum as if instead of the further sum there were two separate trivial commutation lump sums as follows—
	(i) one (“the first part of the further sum”) consisting of so much of the further sum as is attributable to the sums and assets mentioned in paragraph (1)(e), and
	(ii) another consisting of the remainder of the further sum,
	(b) the first part of the further sum is to be treated for the purposes of section 636B of ITEPA 2003 as having been paid immediately before the remainder of the further sum,
	(c) section 636B of ITEPA 2003 applies in relation to the first part of the further sum with the omission of its subsection (3), and
	(d) for the purposes of applying section 636B(3) of ITEPA 2003 in relation to the remainder of the further sum, the rights to which the first part of the further sum relates are to be treated as rights that are not uncrystallised rights immediately before the remainder of the further sum is paid.
	(6) For the purposes of paragraph (1), if the circumstances are as described in paragraph (1)(d)(ii), the member is treated as not having become entitled to the expected pension as a result of the cancelled contract having been entered into.”
	(2) The amendment made by sub-paragraph (1) is to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs under the powers to make regulations conferred by section 164(1)(f) and (2) of FA 2004.
	Preservation of protected pension age following certain transfers of pension rights
	7 (1) In paragraph 22 of Schedule 36 to FA 2004 (protection of rights to take benefit before normal minimum pension age) after sub-paragraph (6) insert—
	“(6A) A transfer is also a block transfer if—
	(a) it involves the transfer in a single transaction of all the sums and assets held for the purposes of, or representing accrued rights under, the arrangements under the pension scheme from which the transfer is made which relate to the member,
	(b) the transfer takes place—
	(i) on or after 19 March 2014, and
	(ii) before 6 April 2015, and
	(c) the date mentioned in sub-paragraph (7)(a) is before 6 October 2015.”
	(2) In paragraph 23(6) of Schedule 36 to FA 2004 (meaning of “block transfer”) after “22(6)” insert “and (6A), but for this purpose paragraph 22(6A)(c) is to be read as if its reference to paragraph 22(7)(a) were a reference to sub-paragraph (7) of this paragraph”.
	Operation of enhanced protection of pre-6 April 2006 rights to take lump sums
	8 In paragraph 29 of Schedule 36 to FA 2004 (modifications of paragraph 3 of Schedule 29 to FA 2004 for cases where there is enhanced protection) after sub-paragraph (3) insert—
	“(4) Paragraph 3 applies as if in sub-paragraph (8A)(a) for “is one third of” there were substituted “is—
	(VULSR/VUR) x (LS + CAPP)
	where VULSR, VUR and LS have the same meaning as in sub-paragraph (1), and CAPP is”.
	(5) Paragraph 3 applies as if in sub-paragraph (8A)(b) for “is one third of the sums, plus one third of” there were substituted “is—
	(VULSR/VUR) x (LS + EP)
	where VULSR, VUR and LS have the same meaning as in sub-paragraph (1), and EP is the total of the sums, and”.”
	Protected lump sum entitlement following certain transfers of pension rights
	9 In paragraph 31(8) of Schedule 36 to FA 2004 (“block transfer” has meaning given by paragraph 22(6) of Schedule 36 to FA 2004)—
	(a) after “22(6)” insert “and (6A)”, and
	(b) at the end insert “, and reading paragraph 22(6A)(c) as if its reference to paragraph 22(7)(a) were a reference to sub-paragraph (3) of this paragraph.”
	10 (1) In paragraph 34(2) of Schedule 36 to FA 2004 (modifications required by paragraph 31 in cases involving protected entitlements to lump sums) the sub-paragraphs treated as substituted in paragraph 2 of Schedule 29 to FA 2004 are amended as follows.
	(2) In the substituted sub-paragraph (7A), in the definition of AC, for “(7AA) and (7B))” substitute “(7AA) to (7B))”.
	(3) After the substituted sub-paragraph (7AA) insert—
	“(7AB) Where paragraph 1A applies to the lump sum, AC is the total of—
	(a) the sums held, at the time the lump sum is paid, for the purpose of providing the pension at that time expected to be the pension in connection with which the lump sum is paid, and
	(b) the market value at that time of the assets held at that time for that purpose.
	(7AC) Where paragraph 1B applies to the lump sum, AC is the total of—
	(a) the sums held, at the time the lump sum is paid, for the purpose of providing the expected pension (see paragraph 1B(2)(b)), and
	(b) the market value at that time of the assets held at that time for that purpose.”
	Reporting obligations
	11 (1) In the Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I.2006/567) after regulation 18 insert—
	“Modified operation of these Regulations in the case of certain pre-6 April 2015 lump sums
	19 Lump sums to which paragraph 1B of Schedule 29 applies
	‘(1) Regulations 3 to 18 have effect subject to the following provisions of this regulation.
	(2) Paragraphs (3) to (8) apply if—
	(a) a lump sum is paid by a registered pension scheme (“the paying scheme”) to a member of the scheme,
	(b) paragraph 1B of Schedule 29 applies to the lump sum, and
	(c) the member’s becoming entitled to the actual pension mentioned in paragraph 1B(2)(h) of Schedule 29 has the effect that—
	(i) the member also becomes entitled to the lump sum, and
	(ii) the member’s becoming entitled to the lump sum is a benefit crystallisation event.
	(3) For the purposes of—
	(a) reportable event 6,
	(b) regulation 3 so far as applying by virtue of that event, and
	(c) obligations under regulation 14(1),
	the benefit crystallisation event mentioned in paragraph (2)(c)(ii) is treated as occurring—
	(i) in respect of the scheme to which the transfer mentioned in paragraph 1B(2)(g) of Schedule 29 was made (“the receiving scheme”) and not in respect of the paying scheme, and
	(ii) when the member becomes entitled to the actual pension or, if later, on 5 August 2014.
	(4) For the purposes of regulations 15(2)(a) and 17(5)(a)(i) and (7)(a)(i), that benefit crystallisation event is treated as occurring in respect of the receiving scheme and not in respect of the paying scheme.
	(5) For the purposes of—
	(a) reportable event 7 (but not its definition of “the entitlement amount”),
	(b) reportable event 8, and
	(c) regulation 3 so far as applying by virtue of either of those events,
	the lump sum is treated as having been paid—
	(i) by the receiving scheme and not by the paying scheme, and
	(ii) when the member becomes entitled to the actual pension or, if later, on 5 August 2014.
	(6) For the purposes of reportable event 7 “the entitlement amount” is the total of—
	(a) the sums held, at the time the lump sum is actually paid, for the purpose of providing the expected pension mentioned in paragraph 1B(2)(b) of Schedule 29, and
	(b) the market value at that time of the assets held at that time for that purpose.
	(7) The scheme administrator of the paying scheme is to provide the scheme administrator of the receiving scheme with the following information—
	(a) the date the lump sum was paid,
	(b) the amount of the lump sum,
	(c) the total of—
	(i) the sums held, at the time lump sum is paid, for the purpose of providing the expected pension mentioned in paragraph 1B(2)(b) of Schedule 29, and
	(ii) the market value at that time of the assets held at that time for that purpose, and
	(d) a statement that no further pension commencement lump sum may be paid in connection with that expected pension.
	(8) The scheme administrator of the paying scheme is to comply with its obligations under paragraph (7) before—
	(a) the end of 30 days beginning with the date of the transfer mentioned in paragraph 1B(2)(g) of Schedule 29, or
	(b) if later, the end of 3 September 2014.
	20 Lump sums to which paragraph 1B of Schedule 29 fails to apply
	‘(1) Regulations 3 to 18 have effect subject to the following provisions of this regulation.
	(2) Paragraph (3) applies if—
	(a) a lump sum is paid by a registered pension scheme (“the paying scheme”) to a member of the scheme,
	(b) paragraph 1B of Schedule 29 does not apply to the lump sum, but the conditions in paragraph 1B(2)(a) to (g) are met in the case of the lump sum, and
	(c) as at the end of 5 October 2015 it is the case that the lump sum is to be taken as having been an unauthorised member payment.
	(3) For the purposes of reportable event 1, and regulation 3 so far as applying by virtue of that event, the lump sum is treated as having been paid—
	(a) by the receiving scheme and not by the paying scheme, and
	(b) on 6 October 2015.”
	(2) The amendment made by sub-paragraph (1) is to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs under such of the powers cited in the instrument containing the Regulations as are applicable.
	Scheme sanction charges
	12 (1) In section 239(3) of FA 2004 (cases where person other than scheme administrator is liable for a scheme sanction charge)—
	(a) after “But” insert “—
	(a) ”, and
	(b) at the end insert “, and
	(b) in the case of a payment of a lump sum to a member where the conditions in paragraphs 1(1)(b) and (d) and 1B(2)(a) to (g) of Schedule 29 are met, the person liable to the scheme sanction charge so far as relating to any part of the lump sum within the permitted maximum is the scheme administrator of the registered pension scheme to which the transfer mentioned in paragraph 1B(2)(g) of Schedule 29 is made.”
	(2) In section 239 of FA 2004 (scheme sanction charges) after subsection (3) insert—
	“(3A) For the purposes of subsection (3)(b) “the permitted maximum”, in the case of a lump sum paid to an individual, is the amount that in accordance with paragraph 2 of Schedule 29 would be the permitted maximum for that lump sum if the individual became entitled at the time the lump sum is paid to the pension at that time expected to be the pension in connection with which the lump sum is paid.”
	(3) In section 268 of FA 2004 (discharge of liability to scheme sanction charges etc) after subsection (7) insert—
	“(7A) Subsection (7) applies with the omission of its paragraph (a) if the scheme chargeable payment is a payment of a lump sum where the conditions in paragraph 1B(2)(a) to (g) of Schedule 29 are met.”
	(4) In the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I.2006/572) in article 18 (which provides for paragraph 1(1)(b) of Schedule 29 to FA 2004 to be omitted in certain cases) at the end insert “, and section 239 has effect in the case of a lump sum paid to that individual as if its subsection (3)(b) did not include a reference to paragraph 1(1)(b) of Schedule 29”.
	(5) The amendment made by sub-paragraph (4) is to be treated as made by the Treasury under the powers to make orders conferred by section 283(2) of FA 2004.
	Power to make further adjustments
	13 In section 166 of FA 2004 (payments by registered pension schemes: the lump sum rule) after subsection (4) insert—
	“(5) The Commissioners for Her Majesty’s Revenue and Customs may by regulations amend Part 1 of Schedule 29, or Part 3 of Schedule 36, in connection with cases involving a lump sum within subsection (6).
	(6) A lump sum is within this subsection if—
	(a) the sum is paid on or after 19 September 2013 and before 6 April 2015, or
	(b) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the pension in connection with which the sum is paid, and on or after 19 March 2014 the contract is cancelled.
	(7) The provision that may be made under subsection (5) includes provision altering the effect of amendments made by the Finance Act 2014.”
	14 In section 282(1) and (2) of FA 2004 (making of regulations and orders) for “Board of Inland Revenue” substitute “Commissioners for Her Majesty’s Revenue and Customs”.
	Commencement
	15 The amendments made by paragraphs 1 to 5, 6(1), 7 to 10, 11(1) and 12(1) to (4) of this Schedule are to be treated as having come into force on 19 March 2014.”—
	(Mr Gauke.)
	Brought up, and added to the Bill.

New Clause 10
	 — 
	Review of reform to the annual investment allowance

“(1) The Chancellor of the Exchequer shall, within three months of the passing of this Act, undertake a review of the impact on business investment of changes to section 51A of the Capital Allowances Act 2001 made by Finance Act 2011.
	(2) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.”—(Catherine McKinnell.)
	Brought up, and read the First time.

Catherine McKinnell: I beg to move, That the clause be read a Second time.
	New clause 10 takes us back to 2010 and the heady first few months of this Government. It takes us back to a time when the coalition, having inherited a growing economy from the Labour Government, choked that recovery off by adopting an anti-growth, short-termist, short-sighted approach to supporting business and jobs. As hon. Members will be aware, one of the Chancellor’s first moves in government was to announce in the June 2010 Budget that he was cutting Labour’s annual investment allowance. The new clause asks the Government to undertake a proper review of the impact on business investment of that terrible decision. We need to learn the lessons from that dreadful mistake.
	Before we consider the new clause in more detail I want to remind hon. Members of the background to this important issue. The annual investment allowance was announced as part of the 2007 Budget by the former Chancellor of the Exchequer, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown). It was introduced as part of a package of reforms to enhance Britain’s international competitiveness, encourage investment and promote innovation and growth. The new allowance replaced first-year capital allowances and meant that from April 2008, under the Labour Government, businesses were able to offset up to 100% of expenditure on general plant and machinery in any given year against taxable profits, up to a limit of £50,000.
	We recognised the value of this important allowance to companies up and down the country in supporting them to invest for the long term, and in helping them to create and safeguard jobs. That is why Labour took the decision to double it as part of a series of measures announced in the March 2010 Budget—in order to
	“support start-ups and small and medium sized enterprises…to position the UK as a leading centre for research and innovation, and to ensure that the UK is equipped with skills for growth and the infrastructure it needs to be successful in a low-carbon economy.”The March 2010 Red Book stated:
	“In order to provide further cash flow support and an incentive to increase business investment, the Government will increase the threshold of the AIA to £100,000 for expenditure incurred from April 2010.”
	That announcement was hugely welcome to businesses up and down the country.

Charlie Elphicke: Will the hon. Lady say what the allowance is today—is it £100,000 or has it gone up?

Catherine McKinnell: We are still at 2010; we will get to the present day in due course, but the hon. Gentleman seems to miss the point somewhat. Obviously, the Conservative party would like to airbrush out the unpleasant blip in 2010, when it almost abolished the investment allowance, and all the impacts that flowed from that, which were evident from the fall in business investment. That is the point that our new clause reinforces. The decision taken at that time was terrible. I do not know what the thinking was behind it—whether it had been planned for a long time by the Conservatives while they were in opposition, or whether it was simply a case of spitefully thinking, “It’s a Labour policy, so we will
	reverse it”—but it had catastrophic implications. As the hon. Gentleman’s question indicates, they had to think again.

Sheila Gilmore: I am sure that my hon. Friend, like me, welcomes the Government’s conversion and the way in which they have changed their policy. However, it is reasonable for us to question why the original decision was taken.

Catherine McKinnell: We can only speculate on what on earth was going through the Chancellor’s mind when he slashed an incentive that was clearly supporting those businesses in the very manufacturing industries that he claims to champion in making long-term investments, and creating and safeguard the jobs that we need so desperately.

David Gauke: This policy was part of a package that included a significant reduction in corporation tax rates, which more than offset any impact on investment from the changes to the annual investment allowance. The Labour party has made it clear that it would increase corporation tax. This week, it has set out its test, which is to have the lowest corporation tax rate in the G7. That would enable a future Labour Government to increase corporation tax to 26%. Will she rule out a Labour Government increasing corporation tax to 26%?

Catherine McKinnell: Once again, Conservative Members, and indeed the Minister, want to brush over this inconvenient part of their so-called plan. They clearly made a bad decision in 2010. The purpose of the new clause is to show that. If the reduction in the annual investment allowance was offset by the reduction in corporation tax, as the Minister argues, why did they revisit the decision and increase the allowance again? That would not have been necessary if their only plan for supporting business up and down the country, which was to reduce corporation tax, had been successful. We supported that plan, but it was not enough on its own to offset the damaging uncertainty created by slashing the annual investment allowance from £100,000 to £25,000 in one fell swoop.

Charlie Elphicke: Will the hon. Lady rule out an increase in corporation tax under the next Labour Government, should one ever be elected—yes or no?

Geoffrey Robinson: We are not discussing that.

Catherine McKinnell: My hon. Friend makes a fair point: that is not what we are discussing. However, I am interested to know whether the hon. Gentleman will rule out slashing the annual investment allowance with no notice if the Conservatives are re-elected in 2015. Will he confirm that—yes or no?

Charlie Elphicke: I hate to disappoint the hon. Lady, but I am not part of the Government. It is not for me, a Back Bencher, to rule anything in or out. I am proud that the Government have set the annual investment allowance at £250,000 and have massively reduced corporation tax. That is really great for business.

Catherine McKinnell: The hon. Gentleman is obviously not able to rule in or rule out any slashing of the annual investment allowance, but we have had so much chopping and changing that there is major uncertainty over whether the Chancellor and other Conservative Ministers have a sensible approach to investment. It is as though they do not understand that chopping and changing—slashing the annual investment allowance from £100,000 to £25,000 and then increasing it again—is the worst approach if we are trying to encourage business investment in this country. That is the kind of uncertainty that we have seen under this Government. Although the hon. Gentleman cannot rule anything in or out, I am interested to hear whether the Minister will rule out any further chopping or changing on this policy.

Gordon Birtwistle: I am in favour of capital allowances. I had an engineering company, and we believed that the Government should support successful engineering and manufacturing companies. Does the hon. Lady accept that a capital allowance of £50,000 on its own is not enough to encourage growth in the economy? Under the Labour Government, from 2007 onwards, GDP went down by 7% in the manufacturing sector, and probably by even more in some manufacturing sectors. I accept that we should have capital allowances, but they should be linked to other things. Does she agree with that?

Catherine McKinnell: That is very much the point that I was making and that we have made all along. We had a financial crisis in 2008, and the Labour Government did everything that could be done in those difficult times to support businesses in order to maintain investment levels, safeguard jobs and lay the foundations for the jobs of the future. That is why Labour decided to bring in the investment allowance, and then to double it in the Budget in March 2010. We knew that businesses needed certainty at that difficult time in the economic cycle to make investment decisions. That proved successful.
	The U-turn by this Government was not quick enough. We called for it in every Finance Bill. Their eventual U-turn proved that the annual investment allowance was a successful policy, because they recognised that it needed to be reinstated. We have had these debates many times. We have supported the reductions in the corporation tax rate as part of a package of measures to support investment, jobs and growth. Unfortunately, the Government thought that corporation tax rates would do the job on their own. That is why they decided to slash the investment allowance, and to put all their eggs in one basket—the corporation tax basket. We have made it clear that we support a competitive rate within the G7 and the current rate, in order to provide the competitiveness that will create jobs and growth. The hon. Member for Burnley (Gordon Birtwistle) is right that that has to be part of a package of measures.
	One key issue that businesses always raise is certainty. In chopping and changing this policy, the Government have undermined the certainty that is needed to give businesses the confidence to invest for the future.

David Gauke: Will the hon. Lady give way?

Catherine McKinnell: I will give way again, but I hope that it is in order for the Minister to confirm that the Tory party will rule out any further chopping and changing on the annual investment allowance.

David Gauke: Our plans on the annual investment allowance are clear: this is a temporary increase until December 2015. If the hon. Lady disagrees with that and has a different policy, I would be grateful to hear what it is. She talks about certainty. She has repeated the position that her party has taken this week, which is that this country should have the lowest corporation tax rate in the G7. The second lowest corporation tax rate in the G7 is 26.5% in Canada. That would allow a future Labour Government to increase corporation tax not just from 20% to 21%, but up to 26%. Is that the policy of the Labour party?

Dawn Primarolo: Order. As interesting as some Members might find the debate on corporation tax and the future policy, that is not the subject of the new clause that we are discussing. Although the subject is linked to the question of allowances, it is not the substantive point. I would be grateful if Members addressed their remarks mainly to the new clause. They may use supporting arguments, but they must not allow those supporting arguments to become the only things that are debated.

Catherine McKinnell: Thank you, Madam Deputy Speaker, for your sage guidance. I agree that the Minister appears to be diverting the discussion away from the issue of concern: the Government’s approach to the annual investment allowance, which is the subject of the new clause. It calls for a review of the impact of the Government’s decisions on the allowance. He seems very reluctant to address that issue.

Geoffrey Robinson: Strictly on the annual investment allowance, is my hon. Friend not absolutely on the button when she says that the question under discussion is not corporation tax or anything of the kind, but rather the AIA and the strictly temporary nature of the Government’s increase and extension of it? Will the Government commit to extending the AIA beyond the election, or is this just another election ploy?

Catherine McKinnell: My hon. Friend raises an important point, and that is the first time we have heard a Government Minister confirm that this is a temporary measure. I think that reinforces the argument in the new clause, which is that we should analyse the impact of the various changes to the AIA, year on year—it has gone up, down and all around—on businesses and their investment decisions. Hopefully, that will inform any decisions on the allowance, whether by a future Conservative Government or, as is more likely, a future Labour Government.

Charlie Elphicke: The temporary nature of the investment allowance is clearly set out in a press release issued on 1 January 2013, and I am staggered that the hon. Lady says this is the first time she knew about it. The Labour party ought to brief itself better than that.

Catherine McKinnell: Well, it simply reinforces the impression—in fact, the reality—that the Government are perfectly well disposed to chopping and changing their policy and approach to the annual investment allowance. That is the point we are trying to make, and
	the point behind the new clause. The Government should stop and take a look. I have heard from businesses that they would rather have no investment allowance than have chopping and changing of the AIA, because that can be destabilising for investment decisions. They would rather have a more stable approach to policy making than that being displayed by the Government.
	Returning to the history of the investment allowance, the previous Labour Government doubled it, recognising its importance to giving businesses confidence to invest for the future, and to be supported within the tax system to make such decisions. What happened after it was doubled? We know that, in his infinite wisdom, the Chancellor decided as part of his emergency Budget—or so he called it—in June 2010, to announce to great fanfare that the annual investment allowance would be cut. However, it would not just be cut. At a time when the economy was growing after the financial crisis, the Chancellor decided that the best way to secure the recovery and back British businesses and jobs was to slash the annual investment allowance to just £25,000 from April 2012, as in the Finance Act 2011. He sought to reassure us that the impact of that reduction from £100,000 to £25,000 would be limited because:
	“Over 95% of businesses will continue to have all their qualifying plant and machinery expenditure fully covered by this relief.”—[Official Report, 22 June 2010; Vol. 512, c. 175.]
	In other words, the Chancellor believed in June 2010 that only 5% of firms were receiving any benefit from the annual investment allowance. HMRC’s tax information note at the time stated:
	“Over 95 per cent of businesses are expected to be unaffected as any qualifying capital expenditure will be fully covered by the new level of AIA (£25,000).”
	It went on to clarify that
	“between 100,000 and 200,000 businesses will have annual capital expenditure of over £25,000”.
	Therefore, in the Chancellor’s terms, only 5% of businesses would have been affected by his decision to slash the allowance. In anyone else’s terms, however, that is somewhere between 100,000 and 200,000 firms. That is a significant number of businesses that are employing—or potentially employing—a significant number of people, while also indirectly supporting employment through their supply chains. That seems to ring true of the Government’s approach because when they speak about being pro-business, they seem to forget the many businesses out there that do not fit the Tory vision of what businesses are, and it seems that those 100,000 or 200,000 firms did not feature on the Chancellor’s radar.
	Let us remind ourselves briefly of some of the views expressed at the time about the decision the Chancellor took. The independent Institute for Fiscal Studies commented that losers from the cut
	“would be those firms with capital intensive operations—with long lasting equipment and machinery—that currently benefit most from the capital allowances. While this is likely to apply to more firms in the manufacturing and transport sectors, it may also be true for some capital intensive service sector firms.”
	A senior economist at the manufacturers association, the Engineering Employers Federation, said that financing cuts to corporation tax by
	“cuts to investment allowances will be a heavy price to pay, especially for smaller companies. It might be a positive signal for large companies, but not for their suppliers.”
	In evidence to the Treasury Committee on the June 2010 Budget, John Whiting, then tax policy director at the Chartered Institute of Taxation and now director of the Office of Tax Simplification, expressed his concern that the measure would particularly hit medium-sized firms.
	The June 2010 Budget cut the annual investment allowance to £25,000 from April 2012 on the grounds that, in the Chancellor’s view, only 5% of firms would be affected. We then had two autumn statements and two Budgets, at which we put these arguments to the Government, before the Chancellor announced in the autumn statement 2012, again to great fanfare, that he would “temporarily” increase the AIA—the one he had just cut to £25,000—to £250,000 from January 2013.
	What happened to business investment between the June 2010 Budget and the 2012 autumn statement that drove the Chancellor to move from feeling perfectly comfortable in slashing the annual investment allowance, because more than 95% of businesses would be unaffected, to announcing in 2012 a significant increase in the AIA to £250,000? Let us cast our minds back to what the Chancellor said when he announced that decision in autumn 2012. He said he was increasing the annual investment allowance because:
	“It is a huge boost to all those who run a business and who aspire to grow, expand and create jobs.”—[Official Report, 5 December 2012; Vol. 554, c. 881.]
	What exactly does that say about the Chancellor’s cavalier approach back in 2010? Surely the complete opposite—[Interruption.] I see Government Members rolling their eyes, but unfortunately they need to face the truth.

Therese Coffey: The hon. Lady is right—I should not roll my eyes; I should get up and engage in debate. We know about the note left by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne): “There is no money left”. Since then, the Office for National Statistics has confirmed that the recession was even deeper than expected. The Government made choices at the time, and there was a clear intention to start to reduce the rate of corporation tax in the grand fiscal regime. Nevertheless, there has certainly been a successful demonstration of industrial strategy, and many more millions of jobs are now being created. It is right that we put our backing behind reinvestment in capital allowances.

Catherine McKinnell: It is a little desperate to try to justify what is proven to have been a flawed decision-making process back in 2010. By the Chancellor’s own accounts, the measure was a huge blow to all those businesses that aspire to grow, invest for the long term and create jobs.

Sheila Gilmore: Does my hon. Friend agree that it seems odd to suggest that the chopping and changing was due to a sudden discovery that the economy was improving? The decision, in effect, to reintroduce the allowance was taken in 2012, when growth was extremely low. It would appear from these plans that, having declared an intention to increase the allowance briefly to £500,000 for one year only, it could drop down to £25,000 in January 2016. What kind of investment planning are companies able to do on that basis?

Catherine McKinnell: As ever, my hon. Friend makes an insightful intervention and raises the key question. The Government need to take a step back and look at the impact their decision-making is having on businesses and their ability to make the long-term decisions necessary to secure the jobs, economic growth and the rebalancing of the economy that we all wish to see.
	The Chancellor and his Treasury Ministers cannot have it both ways: either the annual investment allowance supports growth and the creation of jobs or it does not. Labour welcomed the decision to increase the allowance from January 2013 to £250,000, because we know it is important to support business growth and to foster long-term investment. However, we are concerned—this is why we have tabled new clause 10—about the Chancellor’s erratic and, frankly, bizarre approach to this important issue. Slashing the allowance from £100,000 to £25,000 and then announcing that they would temporarily increase it to £250,000, all in the space of just two and a half years, does not, and did not, inspire confidence in the Government’s long-term approach and strategy for supporting growth and investment.

Gordon Birtwistle: As I said, I fully support any funding that goes into capital allowances, but we have to remember that in 2010 companies were not making much profit. They were mainly on their knees from the recession that had been created previously. Companies can only set their allowance against profit, so if they are not making a profit there is no allowance to claim. The Inland Revenue was probably right to say that only 5% of companies were taking it up, because we were coming out of recession. A lot more companies are now busy working hard and making a profit, so the capital allowance is more beneficial to them as they are getting it back against the tax that they are paying now that they were not paying in 2010.

Catherine McKinnell: I know the hon. Gentleman’s interest in this issue is sincere. The Treasury may or may not have been right in its assessment that only 5% of businesses would be affected, but that is still 100,000 to 200,000 businesses—not to mention the supply chain. The new clause seeks an assessment of the impact of the decision taken at the time. How much of an impact did it have?
	The hon. Gentleman says that, as we come out of recession, some businesses will be making more profit and will therefore be able to make more use of the annual investment allowance. That was exactly the point of bringing in the allowance in 2010. We had been through a global financial crisis and we knew that many businesses would be very uneasy about making the sort of long-term financial investments, on which they would not see a return immediately, that are necessary to create jobs. The intention of introducing and doubling the allowance in 2010 was to give businesses the confidence to invest. We know that it was welcomed by business at the time and we know that this Government’s decision to slash it to £25,000 was abhorrent to many businesses, particularly in the manufacturing sector. They needed the support and confidence to make the investments that we need to start seeing the benefits of now.

Gordon Birtwistle: The hon. Lady is being very generous. Does she accept that if a company is not making a profit, it will not have the capital resources to purchase the assets against which they can get the capital allowance? What is the point of the Chancellor making it available if companies, which are coming out of recession and really struggling with cash flow, will not be able to find the cash to buy the assets to claim the allowance against? Surely it is better saving it until companies are beginning to make cash profits. They can then buy the assets to improve the profitability of the company and claim the asset back.

Catherine McKinnell: I think the hon. Gentleman is rather confused. The purpose of the allowance is to enable companies to invest and to take advantage of tax support. If they are not able to take advantage of the annual investment allowance, there is no cost to the taxpayer, so why chop and change the regime and create uncertainty? Businesses need, from one year to the next, to be able to project and say, “This year we cannot afford to make an investment, but next year we can afford to invest so much in plant and machinery and we will be able to offset so much of that against tax.” The Government, however, have been chopping and changing the allowance. Companies cannot make long-term investment decisions from one year to the next without knowing exactly what their tax position will be.
	The hon. Gentleman is actually making a very good argument for new clause 10 and I will be very surprised if he does not support us in the Lobby this afternoon. He speculates on companies that may or may not be able to invest and take advantage of the annual investment allowance. Our new clause asks the Government to undertake a proper review of the impact of slashing the annual investment allowance and then increasing it on a temporary basis. Many businesses have said to me—I am sure they have said it to the hon. Gentleman—that it is that uncertainty that creates the difficult environment for businesses to invest. They do not know, from one year to the next, what any tax allowance might be. We want to get to the bottom of that, so the mistakes the Chancellor made in 2010 will not be repeated.
	Andrew Gotch of the Chartered Institute of Taxation commented on the increase announced at the 2012 autumn statement:
	“This is a very generous increase that will be warmly welcomed by many small businesses...However, we note that it is only a temporary increase. Business would really welcome some stability in this area. In recent years, the allowance has fallen from £100,000 to £25,000. Now it will rise to £250,000 before, apparently, coming back to £25,000. Businesses like certainty above everything and the chopping and changing of the AIA has been a problem”.
	Hon. Members do not need to take it from me, but from a whole range of sources who have raised this as a concern. The Institute of Chartered Accountants in England and Wales welcomed the increase to the allowance, but said:
	“We are less enthusiastic about the frequency of the change to this amount.”
	Let me be clear, the Opposition welcomed the 2013 increase in the annual investment allowance to £250,000, but we share the very serious concerns about the extremely complex manner in which that was implemented. As hon. Members may be aware, many organisations and
	individual businesses raised concerns that the increase to £250,000 would run from January 2013 to January 2015, rather than over companies’ usual accounting periods, making it problematic for firms, particularly small ones, to administer. Indeed, as the Association of Taxation Technicians neatly put it at the time,
	“the chopping and changing of capital allowances will lead to error, confusion and higher professional costs for small businesses.”
	The Opposition also welcomed the Chancellor’s announcement in Budget 2014 to extend the period of the temporary increase to 31 December 2015, with the allowance being temporarily increased again to £500,000 from April 2014. The straight fact, however, is that the Chancellor and his Government have tied themselves in knots over this vital issue. Just last year, when we considered in Committee what is now the Finance Act 2013, the then Economic Secretary to the Treasury, the Secretary of State for Culture, Media and Sport, the right hon. Member for Bromsgrove (Sajid Javid), explained why the increase in the allowance to £250,000 from January 2013 would be a temporary measure only. He said:
	“We recognise that the change follows quite soon after the decrease in the annual investment allowance to £25,000 that was announced in the June 2010 Budget and implemented in the Finance Act 2011, which took effect from April 2012. The Government’s central position has not changed and remains that, in general, a lower corporation tax rate with fewer reliefs and fewer allowances will provide the best incentives for business investment, with the fewest possible distortions. That is why we have announced a further reduction in the main rate of corporation tax, as we discussed earlier, from April 2015 and is also why the current 10-fold increase in the maximum annual investment allowance is time limited rather than permanent.”––[Official Report, Finance Public Bill Committee, 16 May 2013; c. 145.]
	A matter of months later, at Budget 2014, the Chancellor decided to about-turn once again, and extended and temporarily increased the annual investment allowance further—before, presumably, he intended it to return to £25,000 from 1 January 2016. As the Chartered Institute of Taxation put it so well, the one thing businesses need most, particularly in challenging economic times, is certainty. They need long-term stability and predictability to give them the confidence to invest, to make plans for the future and to take on more staff. What they have got from this Government, however, is a continual chopping and changing, with U-turn after U-turn and what seems to be a complete lack of strategic thinking.
	What we need to hear from the Minister today is confirmation that the Treasury and his Government have taken seriously the impact of their decisions on business confidence, investment and jobs. We need to know that they have learned from the Chancellor’s mistake back in 2010, and that they will properly review its impact to ensure that the same mistake is not made again.
	What assessment has the Minister made of the number of businesses that were not able to grow after the annual investment allowance was slashed? How many jobs could have been created during the last three years of flatlining growth while we have undergone the slowest recovery for 100 years? How many households could have been better off as a consequence, but will find themselves worse off in 2015 than they were back in 2010? Let us not forget that in 2010, back when the Chancellor was slashing the annual investment allowance, he said that the economy would have grown by 9.25%
	by now. Instead, it has grown by just 4.6%—far slower than in the United States or Germany. Indeed, GDP growth this year is still expected to be lower than the Office for Budget Responsibility forecast in 2010.
	On Monday, my right hon. Friend the shadow Chancellor made an important speech about Labour’s approach to developing a business tax system that promotes long-term investment, supports enterprise and innovation and, most importantly, provides a stable and predictable policy framework for business, which is founded on fairness. Yesterday, my right hon. Friend, the Leader of the Opposition set out how a future Labour Government will mend Britain’s fractured economy and develop a genuinely long-term approach to backing growth in every part of this country to ensure rising prosperity for all.
	It is this long-term approach to growth and backing Britain’s business and jobs that has been so lacking from this Government, and nothing illustrates it better than their shambolic and chaotic approach to the annual investment allowance since 2010. For that reason, I urge hon. and right hon. Members to back new clause 10 this afternoon, to ensure that the Government understand the impact of the Chancellor’s dreadful decision making back in 2010, and that they do not make the same mistakes ever again.

Charlie Elphicke: This new clause highlights two problems relating to its proposers and their party. The first is that they are stuck in the past. They have talked about the past and completely failed to set out their case for the future and the kind of Britain they would like to create. They just want to talk about something that happened previously. This is another one of the instrumentalised nuggets of attack, policy and press strategies referred to by Labour’s head of policy.

Catherine McKinnell: Let me correct the hon. Gentleman. He seems not to have been paying attention to my final comments, which were very much about Labour’s strategy for boosting economic growth and sustaining long-term economic stability for the future. The purpose of new clause 10 is to reflect back on past mistakes, of which we believe the Government need to take account.

Charlie Elphicke: Let us be clear what we are talking about. Labour and the hon. Lady want to spend two hours of the time available to debate this Bill talking about a period of nine months that happened nearly two years ago. In 2008, Labour introduced the annual investment allowance—an interesting point to which I shall return. It was set first at £50,000; then raised to £100,000; in April 2012, it was reduced to £25,000, which lasted nine months until January 2013, when it went up to £250,000—a far greater amount than under the legacy left by Labour.

Catherine McKinnell: rose—

Charlie Elphicke: Let me develop my point, and I shall give way again in a few moments.
	It is important and instructive that this Government have incentivised investment. What the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) did not develop during the debate is what underpins the whole issue of investment allowances and capital allowances.
	Why we need capital allowances takes us to the whole issue of business investment. The challenge we all face, and have done for a very long time, is the rising corporate cash balances—about £750 billion—and the desire of us all to see that money spent.
	Let us look at the Government’s policy in this area. They initially announced a reduction to £25,000 from April 2012. The hon. Lady’s first argument was that that created some form of uncertainty. The traditional argument goes, “We need to give businesses time to plan ahead; otherwise, we create uncertainty.” Well, the reduction was part of the June 2010 Budget, and it was about two years after the policy was announced before it came into effect, so I do not think that the certainty argument succeeds. The Government increased the amount substantially after only a short period of time, highlighting their concern to ensure investment.
	The second problem I have with the hon. Lady’s case is that it is high risk to consider a policy on setting an investment allowance or a capital allowance on its own, as the Minister argued in an intervention. It is instructive that when Labour introduced the investment allowance, they funded the initial £50,000 by reducing general capital allowances from 25% to 20%. All policies need to be seen in a package taken together; they cannot properly be considered and debated unless the other pieces in the jigsaw are taken into account.

Stewart Hosie: That argument is fine as far as it goes, but in the space of seven years, we went from the abolition of the industrial buildings allowance to having an annual investment allowance of £100,000, which was then reduced to £25,000 followed by the very welcome increase to £250,000 for two years—and then there was another change. Of course making that many changes in such a short period of time is going to have an impact on planning for investment. Surely the hon. Gentleman can understand that.

Charlie Elphicke: The hon. Gentleman reinforces my point, which is that under Labour there were substantial reductions and changes to capital allowances that were part of the 2008 package. As I said, the main rate of capital allowances was reduced from 25% to 20%, followed by the creation of what was effectively the old first-year allowance—initially at £50,000. A number of other changes went on in parallel, including the phased withdrawal of the industrial and agricultural buildings allowances—IBA and ABA. We need to look at all policies in context and think about what else was going on, and that includes the changes that the Government announced in the Budget of June 2010. No policy can be viewed in a vacuum.
	The decision to cut the annual investment allowance from £100,000 to £25,000 from 2012 was made as part of a general, much wider reform of corporation tax, which was set out capably at the time by Stuart Adam of the Institute for Fiscal Studies in his slides presentation “Business and capital taxes”. Writing about corporation tax reform, he said that the headline rate should be cut from 28% to 24% over four years, and that the small companies rate, the allowance for plant and machinery,
	and the annual investment allowance should all be reduced. It was clear that a reduction in corporation tax was being funded by a reduction in capital allowances. Less tax, less reliefs: that was a very classic, sensible, free-market, pro-growth, pro-business approach. Lowering the headline rate reduced the complexity of the tax system.
	I do not think that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is right to look back into the past; I think that she would do better to look into the future. Rather than viewing one small nugget of Government policy in isolation, whether instrumentalised or not, we should look across the piece to establish what was really going on. I hope that, as recovery builds, we shall see more business investment, and that the £750 billion on which companies are currently sitting will go into the economy to drive our growth agenda.

Geoffrey Robinson: I am very pleased to be able to contribute to a debate whose purpose we seem to lose sight of from time to time. The purpose of the new clause is to review the reforms of the annual investment allowance that have taken place since the Government came to power, and to see what lessons—in very simple terms—can be learnt from them. I do not see why the hon. Member for Redcar (Ian Swales) should not see fit to join us in the Lobby when we vote on the new clause, as I understand we shall do in due course.
	No doubt the Exchequer Secretary will recall our Committee discussions in 2010, which were mentioned by the hon. Member for Dover (Charlie Elphicke). In 2010 we were discussing measures to be introduced in 2012, and while we considered that to be an appropriate period in which the Government could introduce the changes that they wanted to make, we strongly opposed those changes. I think that we were sensible to do so, and I think that we have been proved right.
	It has proved to be a long road to Damascus for the Government. Many arguments can be made for a broadly neutral approach to taxation matters, and I believe that that is a long-standing aim of the Treasury. Indeed, we were very much on that tack ourselves when we came to office. However, the realities of government, and the realities of the Government’s own Budget of 2010, should have informed them that they could not be so purist in their theory as to ignore the fact that, during the five or so years to which the Budget looked ahead, they would require a massive increase in investment in order to sustain the increased levels of growth that they wanted and the whole country needed, and that to secure that increased investment it would be necessary, in turn, to generate a massive, unprecedented level of exports. We made that case ourselves, but it did not carry the day.
	I believe that it was the then Exchequer Secretary who said, “We do not really see what is wrong with companies just investing their depreciation levels.” I pointed out to him that that would barely replace the assets in real terms, and that it was not the way in which to generate an increase in growth, far less the increase in productivity on which the exports could be based. Heaven knows, we need the productivity now more than ever, given that sterling is relatively high. In certain markets we are up against considerable competitive pressures, which we can only fight with real productivity, which is dependent on investment.
	We made the case for some element of discrimination in relation to investment, and that remains the Labour party’s preference. While, as the hon. Member for Dover said, there may have been—and may still be, for all we know—massive cash hoards among the bigger companies in the economy, much of the investment that we need must come from the small and medium-sized enterprises, which I do not think are so rich in cash, especially the small-company element. Although the relatively small sum of £100,000 was not to be sneezed at, we welcome the Government’s conversion to £500,000. Why that is to last only until the election I cannot imagine, unless it is due to some very short-term electoral consideration on the Government’s part, which I do not think is realistic even in my wildest dreams. I am slightly reminded—although I must not digress—of our recent debate on the Office for Budget Responsibility, when, for purely party-political reasons, the Government refused to extend the OBR’s remit to an audit.
	Be that as it may, we are discussing something else now, namely the fact that the Government will not tell us whether they will maintain the same level of AIA beyond the election—which ought to be possible—and for how long it could be maintained beyond the election. After all, the Government have plans. They have a forward look, and in that forward look must feature the proposed level of AIA. They might have to disentangle it from the accounts in due course, but a simple statement from the Exchequer Secretary would set a lot of minds at rest, and provide the element of forward certainty that is so important to small and medium-sized companies, whose investment programmes often run over several years. Smaller companies in particular may not be able to afford a massive investment all at once. As I am sure we shall hear later from the hon. Member for Dundee East (Stewart Hosie), one advantage of the annual investment allowance relates to the setting off of past losses against future profits, and there are other instances in which they can be most helpful. I will not go into them, however, because I know that the hon. Gentleman wants to do so.
	Let me return to the question of why the Government’s approach is still so short-term. I must tell my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) that my only reservation about the review is that the Government have chopped and changed so much, so quickly and, in fact, so excessively over the past four years that I wonder whether anyone would get any meaningful information out of it. I fear not. However, we should be happy about the Government’s apparent damascene conversion. At least they have come round to the idea of annual investment allowances in principle, particularly for smaller companies.

Ian Swales: Will the hon. Gentleman give way?

Geoffrey Robinson: I will in a moment.
	We may well see some element of discrimination in favour of smaller companies in the pattern. We do not want too much discrimination, because it could lead to complication, but I nevertheless feel that the Government should be thinking along those lines, which they probably are. No doubt the Exchequer Secretary will tell us when he winds up the debate. However, at present we have a short-term view of what is essentially a long-term problem. It is not that the level of investment has fallen under this Government or the last Government, or that manufacturing
	has declined under this Government as a proportion of GDP—which it probably has not, because GDP has still not reached the level at which it stood back in 2007. Generally speaking, however, manufacturing has been on a long-term slide, arguably since 1870 and certainly from the 1960s onwards, irrespective of which party has been in power.

Ian Swales: Will the hon. Gentleman give way?

Geoffrey Robinson: I will come to the hon. Gentleman, if he will just be patient.
	Inherent in the problem is the disinclination of the British economy as a whole to invest. Germany can be taken as a paragon of virtue in this respect. The Germans save more than us, and they generally invest more. They have better plant and equipment and higher productivity. They invest more in plant and equipment, but also in industrial relations. Their industrial work force is better equipped technically, from the top to the bottom, and better physically equipped with modern plant and machinery and computers.
	Why is that? No one knows. There is a deep-lying cultural factor. However, it seems to me that if we are to offset it, the more we can afford to encourage investment the better, as long as that is intelligently done. I think that the dangers of misapplication can be much exaggerated, and that the loss of potential output through increased productivity can be underestimated.
	If the hon. Member for Redcar still wants me to give way to him, I will do so.

Ian Swales: I have enormous respect for the hon. Gentleman’s experience in this regard. He has spoken of the importance of long-term certainty. I struggled in vain to find in the major speech made by his leader yesterday any mention of this issue, or indeed any mention of manufacturing. I wonder what he is saying to businesses that may be concerned about the potential for a future Labour Government.

Geoffrey Robinson: I wish I had not given way, because when I do we always get into this tiresome point. The Government seek to find refuge by going back nearly five years. The Minister has been at the Treasury for four and a half years now, and his party has been in government for that long. They own the situation now, although I know they do not want to, as all they want to do is airbrush the last four and a half years out of existence—they did that again today—and concentrate on where they are now as if they took power just six months ago. When we are having a narrow debate on the question of our having a review of a particular failed policy of the Government that is relevant to this issue, the hon. Gentleman wants to bring in the whole of Labour party policy. That is tiresome and irrelevant and a waste of this House’s time. I am sure that when the Minister replies to the debate, he will not get into that.
	We are discussing a very important point. If there is genuine change introducing some element of discrimination in favour of investment for the reasons I have given, we will welcome that. Indeed, we welcome the commitment on £250,000 and £500,000. We will welcome it doubly if the Minister will extend that commitment beyond the election, to put it bluntly to him. I do not know what our policy on that will be—or whether we will go into
	such detail in the manifesto—but I will certainly support such a proposal, both in principle now and as party policy if it finds such favour. The Government, however, can do something about this now. Will the Minister tell us whether there is a change of policy and a change of principle on their part? If so, why will they not maintain the amount of the allowance and achieve the levels of investment, productivity and exports on which our future depend?

Gordon Birtwistle: As a businessman, I had an engineering company that required a lot of investment. We had to invest heavily to ensure that we were competitive in the markets of the late 1990s and early 2000s. To me, the most important things for investment are confidence and cash. If companies have the confidence to invest, and the cash to invest from the profits they are making, they will invest. The capital allowances that the Government allow them to have against their profits is very helpful and it does persuade—it persuaded me on a number of occasions to buy some very expensive computer-controlled engineering machines. But when there is no confidence and when there is very little cash around, not many companies think about how much capital allowance they will get if they invest.
	The country was in a mess in 2007. There was a reduction of over 7% in GDP in 2007-08, so nobody was confident enough to take the step to invest. The confidence had to be put back into the industries to persuade managing directors to invest. We know that billions of pounds were stored in banks waiting to be invested, but the confidence was not there to invest.
	If Members look at Hansard, they will see that the Chancellor complimented me for putting pressure on him to bring back capital allowances, and my hon. Friend the Minister will remember the meetings I had when I was the Parliamentary Private Secretary to the Chief Secretary to the Treasury. At every meeting we had I was constantly on to him about the need to try to give confidence to companies, to persuade them to invest in the future of manufacturing in the UK. The answer came back, “There is no confidence at the moment, but we hope there will be soon, but we have all this money stashed away in banks, which is moderately safe.” It was not totally safe, because the banks were not out of the mess they were in, but companies felt it was safer there, rather than invested in capital plant in manufacturing industry.

Chris Williamson: Will the hon. Gentleman touch on why he objects to the proposal of my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell)? I have not heard any criticism or, indeed, any reference to it so far.

Gordon Birtwistle: As I said to the shadow Minister, capital allowances are very close to my heart. I believe they are the way to go, but they have to be linked to other financial policies, which the Government have to put in place to work with them. Capital allowances on their own are no good. We must have other structures within the Government’s scheme of things to ensure companies have confidence. It is no good saying, “You
	can have a capital allowance against a new machine that you want to buy, but we are not prepared to give you the confidence to do that because we are going to increase our taxes so you aren’t going to make any money—so why would you really want to invest in the UK?” We need to create an environment whereby companies will say, “We’ll invest in the UK because the tax regime in the UK is good. We’ll invest in the UK because we feel that the training programmes in the UK will train our young people to do the jobs. We’ll invest in the UK because of the apprenticeship programme that is going ahead, and because we know we will have the future work force to deliver products that we will be able to sell around the world.”

Eilidh Whiteford: The hon. Gentleman is right to say people will make investment decisions on a range of issues, but does he agree that stability is a very important component of that?

Gordon Birtwistle: Absolutely: stability, confidence, cash, training programmes, and an economic strategy for the future are vital for companies to decide to invest.
	I agree with, and certainly do not have any real objections to, the Opposition proposal, but it is not linked to anything. If the Labour party wants to put forward a new economic or industrial strategy that links to this, I would be the first to support it, but this is just one element of a major programme that needs to be put in place.

Ian Swales: I pay tribute to my hon. Friend’s experience on this issue, and his campaigning, which lay at the heart of the increase to £250,000. Does he agree that tax allowances alone do not prevent investment, and in fact capital allowances are a time-shift—in other words, one still gets the tax allowance, but one just gets it later?

Gordon Birtwistle: My hon. Friend is right. We must remember that claiming a capital allowance on a profit is time-lagged, because companies will have worked for a full year and will have produced products at, it is to be hoped, a profit, and it then takes a full year for the accountants to go through the profits, so that is two years from the start, and at the end of the second year the company knows from its audited accounts how much profit it has made and how much it can invest. This does not all happen on day one or even at the end of the trading year, because they do not know just how much can be offset against tax in respect of purchases using capital allowances.
	My constituency has a high proportion of manufacturing, and unemployment has gone down from more than 10% to 4.7%. That is because we are manufacturers. We make things. We create the wealth for the country. One company in my constituency, Lupton and Place, was contemplating buying a new injection moulding machine—it makes aluminium castings for the automotive industry—and it thought about that for quite a long time. I had meetings with it to discuss various schemes that might assist it to do that, but no such scheme was available. However, as soon as we announced the new capital allowances, it immediately ordered the machine. It cost €400,000. It did not get the capital allowance against the whole lot, but it did get the capital allowance against £250,000, as the sum was at the time. Although
	there was some money that it did not get a capital allowance against, under our strategy it was able to write the rest of it off against depreciation of the machine over the next few years.
	I accept the need for capital allowances, therefore, and I hope the Minister takes that back to the Chancellor, as I have done on many occasions, to ensure that companies keep investing in this country. However, the main factor before people invest in anything is confidence—confidence that the country is going forward, and that there is growth and companies can see profits coming. People are not going to invest anything in anything unless they get a return. Returns are important for shareholders, business owners and partners in business, and if there is not going to be a return on the investment, they are not going to invest. If the confidence to invest is there and the cash is there to support the purchase, either from their own resources or from banks to ensure that the investment is made, capital allowances will be a major player in the investments that take place. On their own, they are not enough; they need to go with an overall industrial strategy. I am pleased to say that I believe that is happening.

David Gauke: It is a pleasure to respond to this debate, and in particular to follow my hon. Friend the Member for Burnley (Gordon Birtwistle), who has been a great advocate for manufacturing industry over the years he has been in Parliament. He has provided a strong voice on the issue of capital allowances.
	Labour’s new clause asks that the Chancellor review the impact on business investment of changes to the Capital Allowances Act 2001 made by the Finance Act 2011. The new clause is identical to the new clause 5 we opposed in Committee and we will be opposing this new clause for the same reasons. As set out in our corporate tax reform road map, the Government’s central objective is to secure a low corporation tax rate, with fewer reliefs and allowances. We remain of the view that that strategy provides the best incentives for business investment. As part of that approach we reduced the annual investment allowance to £25,000 a year in the Finance Act 2011, at the same time as we were setting out our plans to reduce corporation tax—we have extended those plans and as of next April our corporation tax rate will be 20%, the lowest in the G20.

Chris Williamson: The Minister is trying to set out the Government’s position, which he would assert is one of success. If their policies are really so effective, how does he explain the fact that we are living through the slowest economic recovery for more than 100 years?

David Gauke: If the hon. Gentleman wants to debate that, I am happy to do so. We faced a crisis in the eurozone and we had to deal with the impact of the financial crisis that occurred on the last Government’s watch. Clearly that had a considerable impact on the growth of the UK economy and the economies of other developed countries, but the reality is that our economy is now growing strongly, and we need to ensure that that continues to be the case. There are risks to a recovery, but if we are to compete and succeed, we need to ensure that we have a competitive tax system, the conditions for growth and credible fiscal plans, all of which this Government are delivering as part of our long-term economic plan.

Chris Williamson: The Minister has just asserted that the economy is growing strongly, but I am surprised by that. Will he help the House by comparing that “strong growth” with the growth that took place in the 1950s, 1960s, 1970s and even in the 1980s, at a time, before the regrettable election of Margaret Thatcher, when regulation was significantly greater than it is today and when trade unions were more numerous than they are now? How does this “strong growth” compare with what happened in the period I have just outlined?

David Gauke: It is a little difficult to compare a period in the 1980s before the election of Margaret Thatcher, given that she was elected in 1979. What I say to the hon. Gentleman is that we are forecast to have the fastest growth in the G7 this year. Clearly, Members on both sides of the House should welcome that, but we must not be complacent because we have further to go and we need to ensure that we stick to the plan to deliver that growth on a sustainable basis.

Stewart Hosie: The Minister has said he has plans for low corporation tax, and fewer reliefs and allowances—I understand the strategy. He will be aware that the argument is that it helps to establish profitable businesses but is less helpful to growing, investing businesses. Even if he was right, that would rather argue against the Government increasing the annual investment allowance to £250,000. Therefore, is the report envisaged in the new clause not precisely what is required to identify whether that allowance is at the correct level?

David Gauke: I am grateful to the hon. Gentleman for returning me to the subject matter before us, and no doubt you are, too, Madam Deputy Speaker.
	The Office for Budget Responsibility forecast in the June 2010 Budget stated that the cuts in the corporation tax rate would more than offset the reduction in investment allowances such that the
	“cost of capital for new investment is lower for all non-financial companies, and the rate of return from the existing capital stock is higher”.
	That very important point could easily be missed from this debate. However, we also recognise that in the current economic climate, businesses face particular challenges. Having got the corporation tax rate down significantly, making a temporary boost to support and encourage increased investment was both appropriate and desirable. That is why we introduced a temporary generous increase in the annual investment allowance at the 2013 Budget, and we have gone on to double its generosity a year later.

Bob Stewart: Would the Minister like corporation tax to come down below 20%, if possible? Is that ever envisaged?

David Gauke: My hon. Friend raises an interesting point, which I could spend some time discussing. Some challenges are involved in reducing corporation tax below 20% in terms of ensuring that such a tax cut is well focused in encouraging increased investment. He will be aware of some of the difficulties that occurred when the previous Government temporarily introduced a 0% corporation tax rate for smaller businesses; that resulted in quite a lot of tax-motivated incorporation. I
	will not detain the House for long on this point, so I will just say that some issues would need to be addressed in respect of that.
	What would certainly be damaging would be to reverse the considerable progress we have made on reducing corporation tax. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) placed great emphasis on providing certainty for businesses, and I would agree on that, but what we have done in reducing the corporation tax rate from 28% to 21%, and then to 20% as of next April, has undoubtedly helped the UK’s competitiveness position. One could quote survey after survey demonstrating that the UK is now viewed much more favourably as a place in which to do business because of our corporate tax regime, and it would be damaging were we to reverse this. Labour is on the record as wanting to put corporation tax back up to 21%. That would be the first increase, as a revenue raiser, in corporation tax since the 1960s, and we have heard a significant hint this week that Labour may even increase it to 26%.

Catherine McKinnell: rose—

David Gauke: I hope that is not the case and I am delighted to give Labour’s Front Bencher an opportunity to put an end to such suggestions.

Catherine McKinnell: Once again, the Minister is trying to change the subject from the annual investment allowance to corporation tax. Given that he acknowledges the importance of certainty in this area and that a reduction of the AIA back down to £25,000 is already on the horizon, does he accept that it would be beneficial for the Government, for Members of this House and for members of the public to have an assessment of the impact of that slashing to £25,000 in 2010, in order to inform the Government’s decision making in the future?

David Gauke: That is the fourth opportunity the hon. Lady has had to provide some reassurance to businesses and investors looking to the UK as a place in which to do business that a future Labour Government, should that misfortune occur, would not increase corporation tax to 26%. That is the fourth time she has ducked that opportunity. Corporation tax is linked very heavily with the annual investment allowance; they are not separate issues. If our debate is about ensuring that we have certainty for investment in the UK, it is a very salient point.

Chris Williamson: I am interested in the Minister’s comments. Will he comment on the fact that corporation tax in the United States is up to 35%? Furthermore, does he believe that businesses have a responsibility to contribute to public services and infrastructure investment in our country? If we enter into this arms race and continue to reduce corporation tax, we end up in a situation where we either put the burden of funding our public services and infrastructure investment on ordinary taxpayers, or are forced to make even deeper cuts than we have seen under this Government over the past four years.

David Gauke: As always, the hon. Gentleman’s questions are interesting and could take me in a number of directions. Let me just say this: it is important that the United Kingdom has a competitive tax system. It is the case that corporation tax will continue to play an important part in our tax system, and it is important that it is properly enforced. Indeed, the UK is leading the way on international reform to ensure that we have an international tax system that takes a contribution from companies. In the end, however, it is always individuals who pay tax—whether it is the shareholder, consumer or employee. All tax is paid by people even if the cheque is written by the company.
	Let me return to the measures that we have set out. The Office for Budget Responsibility has said that the measure to extend the AIA is expected to bring forward another £1 billion of business investment in the short and medium term. Although the Government rightly keep all tax policy under review, there is limited merit in conducting an evaluation in the way that the amendment suggests, and there are also a number of obstacles that make it impossible. Her Majesty’s Revenue and Customs will not have the relevant data to conduct such an evaluation for another year, and as the hon. Member for Coventry North West (Mr Robinson) said, it would be extremely difficult to isolate the impact of this change from the other factors influencing business investment, and from subsequent changes, in the ex-post data.
	An important point was made by my hon. Friend the Member for Burnley (Gordon Birtwistle), who said that a number of factors are involved in business investment, not least confidence. As my hon. Friend the Member for Dover (Charlie Elphicke) pointed out, the AIA has been set at various levels over this period; identifying a direct link between the level of AIA and business investment is extremely difficult.

Eilidh Whiteford: The Minister is quite right to point out that there have been dramatic fluctuations in these types of allowances over a long period, but surely that emphasises the point about trying to get better at assessing their impact. If these allowances are a good thing at the moment, the Government might be well advised to consider bringing some stability to the system and committing to them over a slightly longer period.

David Gauke: The point I was making is that it was this Government who introduced a corporate tax road map in 2010. That road map has provided a great deal of certainty to businesses and set out our plans for corporation tax. Given that we have been able to make progress with corporation tax rates in the current circumstances, although businesses feel uncertain about the challenges that lie ahead, including the referendum in Scotland and the possibility that an anti-business Government might be elected at the next general election, it would be helpful to have an annual investment allowance in place.

Catherine McKinnell: The Minister seems to be completely obsessed with corporation tax. Whatever question is put to him about annual investment allowances, he responds with an answer on corporation tax. I wonder whether that reinforces our call for the Government to be forced to look at the issue of annual investment allowances—the chopping and changing of them, and
	the lack of certainty—so that they address AIA as a serious issue that concerns businesses up and down the country.

David Gauke: The hon. Lady does not seem to recognise that there is a link between the annual investment allowance and corporation tax; it is an allowance set off against corporation tax. The two are not separate subjects. Of course, if we are discussing certainty within our tax system, one has to look at the bigger picture, and this Government, through the corporate tax road map, have provided much greater certainty for businesses in this country. The biggest threat to the certainty of our tax system at the moment appears to be a Labour party that is at least considering increasing corporation tax to 26%, which would be a huge increase and deeply damaging for the UK’s competitiveness.

Chris Williamson: Let me return the Minister to the historical context. He keeps implying that a Labour Government would be anti-business, but I challenge him to compare the economic growth record of previous Labour Governments with that of this Conservative Government. I think he will find that the Labour record compares extremely favourably. The truth is that Labour Governments have invested in our economy; what we should be concerned with in this place is improving the living standards for the British people, and they have always achieved that.

David Gauke: We saw the economy shrink by 7% in a year or so under the Labour Government. That is not a record of which to be proud.

Chris Williamson: rose—

David Gauke: I will give way one last time.

Chris Williamson: The Minister seems to imply that the worldwide downturn—the economic recession that was a consequence of the banking crash—was the responsibility of the previous Labour Government. It is a ludicrous assertion. Surely he will accept that there was an international banking crash that led to the economic difficulties with which the Labour Government were faced in 2007.

David Gauke: Let me summarise the hon. Gentleman’s position: when the economy grows under a Labour Government, the Labour Government get the credit, but when it shrinks under a Labour Government, that is to do with international factors. At least we know where he stands.
	We have heard a lot of criticism of the reduction in the annual investment allowance, and I have attempted to try to put that in the context of what we have generally done within our tax system. The impression given by the hon. Member for Newcastle upon Tyne North at all times was that it was a disastrous decision that resulted in business investment being slashed. I do not accept that position at all, and I have made it clear, by putting this in the context of what we are doing with corporation tax, that we are encouraging investment.
	Just this week, the Labour party set out its plans for business tax. As far as I am aware, nothing was said in those plans about the annual investment allowance, or about extending the increase to £500,000 beyond December
	2015. We heard a lot about an allowance for corporate equity, but I do not think that I heard anything at all from the Opposition on this subject. If it is so important to them, why do they not have a policy in this area? Indeed, at one point, it seemed to come as a surprise to the hon. Member for Newcastle upon Tyne North that this was a temporary measure, although subsequently in her speech it became clear that she was aware of that. What is Labour’s position? If Labour Members feel so strongly about this issue and it is a priority for them, why have they said nothing on the subject? On that point, I urge the House to reject new clause 10 if it is put to a vote.

Catherine McKinnell: It is absolutely clear that the Government have tied themselves in knots over the annual investment allowance. They have tried at every turn during this debate to change the subject, and not to deal with the catastrophic decision taken in Budget 2010 to slash the investment allowance from £100,000 to £25,000. That was followed by a welcome U-turn that moved it back up to £250,000, and now they have promised to double it to £500,000. I accept that it is a temporary measure, but the point that I was trying to make, which the Minister seems to have missed, is that the very fact that it is a temporary measure perpetuates the uncertainty, and we know, because businesses have told us, that that uncertainty undermines their confidence to invest.
	The hon. Member for Burnley (Gordon Birtwistle) made a speech that I know was sincere, as he is aware of the importance of the manufacturing industry and of certainty in the tax landscape, particularly regarding the annual investment allowance, in enabling businesses to make investment decisions, to invest in plant and machinery, and to expand to create jobs for the future. However, I might also say that he made a typical Liberal Democrat speech, in that he sat on the fence and would not acknowledge that the Government need to take stock of the impact on investment decisions of chopping and changing this policy.

Ian Swales: rose—

Catherine McKinnell: I give way to another fence-sitting Liberal Democrat.

Ian Swales: I thank the hon. Lady for giving way, and she will be pleased to know that I will not sit on the fence on this issue. Investment decisions about plant and machinery are one-off decisions, and the annual investment allowance is only needed once for each investment decision. What we need is certainty around a specific decision, not long-term certainty.

Catherine McKinnell: That flies in the face of the advice given by the EEF, the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales, which all feel that the Government’s chopping and changing on this policy has been damaging to investment. Someone might want to make a decision to invest this year, next year, or the year after, but obviously if they do not know what the Government’s policy will be in 12 or 24 months’ time, they might well not have that confidence and not take that decision. The hon. Member for Burnley acknowledged that, but the hon. Member for Redcar (Ian Swales) seems to be completely at odds with what industry has been saying.

David Gauke: The hon. Lady says that her concern is that business will not know where it stands on the annual investment allowance when making decisions, but, much more importantly, if a business does not know whether the corporation tax rate will be 20%, 21% or 26%, that will surely have a much bigger effect on investment in this country. Can she provide some clarity on that?

Catherine McKinnell: I agree that business needs certainty about taxation to make investment decisions, and that is why we have committed to maintaining one of the most competitive tax rates in the G7, but today’s theme seems to be that the Government wish to talk only about corporation tax, and to airbrush out their catastrophic mistakes with the annual investment allowance. The hon. Member for Dover (Charlie Elphicke) made a valiant speech, but I felt it was dreadfully misguided. He was in quite a bit of trouble trying to defend the Government’s record in this respect, but frankly the decision making has been erratic and completely indefensible.
	I pay tribute to my hon. Friend the Member for Coventry North West (Mr Robinson), who made a very thoughtful and considered speech in which he set in the historical pre-2010 context some of the rationale behind the Government’s decision making in this regard, but he also highlighted the irrational aspects.
	We take very seriously the need to ensure that businesses have the right environment, the confidence and the certainty that they need to make investment decisions for the future. We are concerned about the Government’s erratic approach to the annual investment allowance. We think that a proper report needs to be produced to ascertain exactly what the impacts of chopping and changing this policy have been. That would ensure that this Government do not make these mistakes in future, that any future Government can learn from the mistakes of this Government, and that we have a proper annual investment allowance strategy for the future that supports the jobs and growth that this economy so desperately needs.

Sheila Gilmore: Does my hon. Friend want to reflect on the suggestion made earlier that it did not really matter to people whether the investment allowance was clear? Surely, when putting forward a formal business plan, people are not necessarily just working on a year-to-year basis; they want to know what, if things go on as they are, they could do in a year’s time, two years’ time, or three years’ time.

Catherine McKinnell: My hon. Friend makes an absolutely valid point. Businesses do not work in electoral cycles or annual tax return cycles; they plan for the future. Businesses have told us how unhappy they have been with the chopping and changing of this policy.
	I am very surprised that the hon. Member for Redcar takes such a strong stance in supporting what has clearly been a disastrous Government policy. I would have thought he would have liked to distance himself from it, but he has obviously tied himself to this mast, and I am disappointed that he will not come through the Lobby with us. We will push our new clause to a
	vote, because we believe that the Government need to take stock and learn from their mistakes, and that this has been an absolute disaster of a policy, in terms of the Chancellor’s indecision.

Question put, That the clause be read a Second time.
	The House divided:
	Ayes 247, Noes 306.

Question accordingly negatived.

Matthew Hancock: On a point of order, Madam Deputy Speaker. Given that the Office for National Statistics has confirmed this afternoon that four fifths of new jobs have been created outside London, and given that the Leader of the Opposition may inadvertently have misled the House by saying that the number of people waiting more than four hours in A and E has risen by over 300% when this is not accurate, may I take your advice on how the Leader of the Opposition may be brought before the House to retract these inaccuracies and apologise?

Eleanor Laing: No, the hon. Gentleman may not take my advice. It is not the position of the Chair to advise hon. Members, far less the Leader of the Opposition, on the content of their speeches, but the hon. Gentleman has put his facts on the record, and I am sure that they have been noted on both Front Benches.

Christopher Leslie: Further to that point of order, Madam Deputy Speaker. Is there anything that you can do to stop these eager Front Benchers seeking Cabinet preferment in the forthcoming reshuffle from making spurious points of order, when what they should do with statistics is allow the Office for Budget Responsibility to audit these—

Eleanor Laing: Order. The hon. Gentleman knows that that is not a point of order, nor could it be further to a point of order, as there was no point of order.

Ian Swales: On a point of order, Madam Deputy Speaker. I made a point of order earlier today regarding a figure used yesterday by the hon. Member for Birmingham, Ladywood (Shabana Mahmood). The 2010 figure that I gave was correct, but I am now aware that the hon. Lady was using a figure derived on a new basis, so the comparison that I drew was incorrect. I felt that that should be put on the record.

Eleanor Laing: I am grateful to the hon. Gentleman—[Interruption.] Order. I am grateful to the hon. Gentleman. That is a point of order. He has put the record straight, and the House is grateful to him.

Debbie Abrahams: On a point of order, Madam Deputy Speaker. Could you advise me, please, with reference to the inaccurate information that was given by the Prime Minister about waiting lists for A and E, and the fact that in 48 out of the past 52 weeks, A and E targets have been missed by this Government—

Eleanor Laing: Order. I have already reminded the House that the content of Ministers’ speeches is not a matter for the Chair, and that is not a point of order.

New Clause 1
	 — 
	Oil contractor activities: ring-fence trade etc

‘Schedule (Oil contractors: ring-fence trade etc) contains provision about the corporation tax treatment of oil contractor activities.’—(Mr Gauke.)
	Brought up, and read the First time.

David Gauke: I beg to move, That the clause be read a Second time.

Eleanor Laing: With this it will be convenient to discuss the following:
	Government new clause 2—Determination of beneficial entitlement for purposes of group relief.
	Government new clause 3—General Block Exemption Regulation.
	Government new clause 4—Co-operative societies etc.
	Government new clause 5—Tax relief for theatrical production.
	Government new clause 6—Exclusion of incentivised electricity or heat generation activities.
	Government new schedule 1—Oil contractors: ring-fence trade etc.
	Government new schedule 2—General Block Exemption Regulation.
	Government new schedule 3—Taxation of co-operative societies etc.
	Government new schedule 4—Tax relief for theatrical production.
	Government amendments 42, 43, 5, 6, 1, 2, 4, 11 to 14, 7 to 10, 15 to 41, 3 and 44 to 66.

David Gauke: I will attempt to speak briefly to this long list of Government new clauses, new schedules and amendments, although I will respond later in the debate if any questions are raised.
	New clause 1 and new schedule 1 make changes to provide a fair amount of taxation for activities carried out on the UK continental shelf in connection with the UK’s oil and gas resources. The Government are committed to maximising the benefits that the North sea can bring to the UK economy while ensuring that all companies benefiting from the UK’s natural resources, either directly or indirectly, pay their fair share of tax.
	The UK is not currently receiving a fair amount of tax from companies that provide drilling rigs and accommodation vessels to the oil and gas industry. Many of those companies own their assets in lower tax jurisdictions overseas. Those assets are then leased to associated entities operating on the UK continental shelf through specialised leasing arrangements know as bareboat charters, giving rise to a large deductible leasing expense in the UK. That results in up to 90% of operating profit made in the UK being moved overseas.
	This measure will cap the amount the UK base contractor can claim as a deductible expense for those leasing payments. It will ensure that companies pay a fair amount of tax for the activities they carry out in connection with the UK’s valuable natural resources.
	New clause 2 makes changes to corporation tax group relief rules to remove an unintended restriction that has been identified in current anti-avoidance legislation. That legislation is well targeted and limits the opportunities for avoidance, for example through artificial groupings.
	However, the rules are triggered in limited circumstances where conditions are agreed or imposed on a group by the Government or a statutory body. That is clearly unintended.
	The clause proposes a restricted amendment to section 169(2) of the Corporation Tax Act 2010 to exclude from the definition of “arrangements” situations where conditions are agreed or imposed by the Government. That will ensure that the anti-avoidance rules are more effectively targeted for the future and that companies involved in these specific commercial arrangements will have improved access to group relief. The amended rules will continue to ensure that they prevent manipulation of company control and group status and will continue to restrict access to group relief where appropriate. That will maintain the fairness and consistency of the tax system.
	Government new clause 3 and amendments 42 and 43 make a number of changes to three capital allowances: enhanced capital allowances for zero-emission goods vehicles; enhanced capital allowances for enterprise zones; and business premises renovation allowances. All are state aids designed to comply with the general block exemption regulation. The existing regulation ended on 30 June and a new one took effect from 1 July. Although it is similar to its predecessor, the new regulation contains a number of differences that need to be reflected in those reliefs. The new clause and the amendments do that. Broadly, they ensure that various definitions found in those reliefs refer to the new general block exemption regulation.
	In the case of enterprise zone allowances, it also excludes expenditure on energy generation, distribution or infrastructure, and broadband networks; restricts qualifying expenditure incurred by large companies in certain enterprise zones to new economic activities; and requires companies that make a production process more efficient to ensure that the qualifying expenditure exceeds by value at least three years’ depreciation of the machines being replaced.
	New clause 4 and new schedule 3 make technical changes to the tax legislation applying to co-operative and community benefit societies, industrial and provident societies, European co-operative societies and credit unions to ensure that the definitions used in the legislation are clear, up to date and work as intended. There has been no policy change on the taxation of the various societies or the reliefs available to them, or indeed their members. There will be no effect on their tax position, but the changes we are making will ensure that the legislation is accurate and fully in accordance with the policy intention.
	New clause 5 will introduce an additional corporate tax deduction and payable tax credit for theatre production costs. Production companies will be eligible for a payable tax credit worth up to 25% of qualifying expenditure for touring productions and 20% for all other productions. These provisions will be available from September for producers of a wide range of theatre and performance, supporting plays, musicals, dance, ballet, opera and circus.

Andrew Bingham: I welcome this particular measure, because the very well known Buxton opera house is in my constituency of High Peak and it hosts lots of touring theatrical companies. Offering
	different types of performances to the area engages people in going to the theatre and promotes the local economy, so the measure’s benefits will be broader than we may have thought at first.

David Gauke: I am delighted to hear of the benefits that my hon. Friend’s constituency and the Buxton opera house will experience.

Peter Luff: Circus is a performing art invented in the United Kingdom and it provides many children with their introduction to the performing arts and leads them to a love of theatre. May I therefore welcome my hon. Friend’s decision to include circuses in those areas covered by the tax relief in new clause 5? The travelling circus industry welcomes that decision, which is already leading directly to new investment in travelling circuses.

David Gauke: Again, I am delighted to hear that. My hon. Friend lobbied us and made representations on behalf of his constituents for the inclusion of circuses. As a consequence of the consultation process and listening to the points raised by my hon. Friend and others, I am delighted that circuses will benefit from this tax relief.

Debbie Abrahams: It is important to support this area, but would the Exchequer Secretary like to comment on the National Audit Office and Public Accounts Committee’s recent reports criticising the Government and Her Majesty’s Revenue and Customs for not properly monitoring the tax reliefs in this area?

David Gauke: The Government will respond formally to that, but I believe that well-designed, well-focused and targeted tax relief, which is what we have, can help the economy grow and help particular sectors. Indeed, I am delighted that two examples have just been provided to us. This Government have successfully lowered rates, including corporation tax, which we have debated this afternoon, and, if particular sectors can be supported by a well-targeted tax relief, we should do that. We believe that, overall, our tax system is working to enhance the UK’s competitiveness. This Government have a good record in the creative sector in particular, and I am delighted that, through new clause 5 and new schedule 4, that will continue.
	New clause 6 amends the list of excluded activities in the tax-advantaged venture capital schemes—the seed enterprise investment scheme, the enterprise investment scheme and venture capital trust schemes—so that a company whose trade consists substantially of the generation of electricity or heat that attracts renewable obligation certificates or payments under the renewable heat incentive will no longer qualify for investment under those schemes, with limited exceptions.
	As in the case with the feed-in-tariff exclusion, community interest companies, community benefit societies, co-operative societies and Northern Irish industrial and provident societies will not be affected by the restrictions. The exceptions for co-ops will also apply to European co-operative societies, in line with the changes being introduced as part of the “taxation of co-operative societies” amendment, which aims to align and update
	all references to industrial and provident societies across the Taxes Acts. The restriction will also not apply where the electricity is generated by anaerobic digestion or by hydropower, nor where heat is generated, or gas or fuel produced, by anaerobic digestion. The measure will apply in respect of both UK ROC and RHI schemes and overseas equivalents. It will make the tax-advantaged venture capital scheme better targeted and effective in supporting small and growing, higher-risk businesses.
	Amendments 5 and 6 make technical changes to clause 73, which will restore sense and fairness to air passenger duty by reforming the destination banding and introducing a simple to understand two-band system. As the House will know, we have devolved the power to set rates on direct long-haul flights from Northern Ireland to the Northern Ireland Assembly, which set the rates at £0 in the Air Passenger Duty (Setting of Rate) Act (Northern Ireland) 2012. As the structure of the tax, including the number and composition of the destination bands, remains a matter for the UK—the Northern Ireland legislation refers to the UK legislation—the Northern Ireland Executive have asked us to make the consequential amendments needed to their legislation so that it aligns with the UK legislation.
	We had an extensive debate in Committee on clauses 192 to 211, which introduce follower notices designed to tackle would-be tax avoiders who attempt to frustrate efforts to resolve their cases. At the time, I emphasised that taxpayers have full rights of appeal to the tribunal against any penalty charged under the rules, and I mentioned a particular ground for making an appeal. We have continued to receive suggestions for clarifying the legislation, particularly on how it could be improved by more clearly spelling out the grounds for making an appeal against the follower notice penalty.
	I am grateful to those who made such points. Having considered them further, I concluded that it would be helpful to table amendments 1 to 3. Amendment 1 specifically sets out the grounds for making an appeal against any penalty charged under the rules. I emphasise that the taxpayer is not obliged to settle their dispute in response to a follower notice. The amendment makes it clear that if the taxpayer has reasonable grounds to continue their dispute, it is open to them to appeal against the penalty and for the tribunal to discharge the penalty on that basis. Amendment 2 makes it clear that that does not mean that the original follower notice and any associated accelerated payment notice were issued incorrectly. Finally, amendment 3 amends schedule 27 to apply those clarifications to partnerships.
	I will take the opportunity briefly to clarify some points made when clauses 192 to 211 were debated in Committee. I mentioned then that 22 responses had been received to the January consultation on the draft legislation. Some commentators have subsequently questioned whether the number was not in fact higher. The draft legislation on follower notices was issued in two separate documents in January, one of which was on tackling marketed tax avoidance. Although we received a total of more than 800 responses, the vast majority related to accelerated payments, and only 22 specifically related to the draft legislation on follower notices that was published at the same time. I hope that that provides clarification.
	In Committee, I was asked whether the accelerated payments regime would
	“reach back to disputed tax liabilities relating to periods prior to the introduction of the DOTAS reporting?”––[Official Report, Finance Public Bill Committee, 17 June 2014; c. 507.]
	I said that it would not. I want to clarify that an accelerated payment notice may not be issued to a taxpayer with a pre-DOTAS tax dispute where DOTAS—disclosure of tax avoidance schemes—is the only criterion available. Even though a scheme may have come into DOTAS after its introduction, anyone using it before DOTAS will not be subject to accelerated payment on DOTAS alone. However, accelerated payment based on a follower notice can apply to pre-DOTAS cases because the notice does not depend on the DOTAS disclosure. I am grateful for the opportunity to provide clarification.
	The Government have tabled amendment 4 so that clause 291 more clearly reflects the Supreme Court’s decision on the limitation period where direct tax has been charged contrary to EU law. The amendment recognises that the ruling of the Supreme Court in the franked investment income group litigation is not confined to claims based on free movement, but applies to all cases in which tax has been charged contrary to EU law.
	Schedule 6, introduced by clause 48, gives effect to recommendations from the Office of Tax Simplification to replace HMRC approval of tax advantaged employee share schemes with a new self-certification arrangement for businesses setting up such schemes. Amendments 11 to 14 make final consequential amendments to remove references to approval of schemes in tax legislation.
	Schedule 7, introduced by clause 49, implements several OTS recommendations, including provisions to simplify the tax treatment of employment-related securities awarded to internationally mobile employees. Under the schedule, a small number of internationally mobile employees who receive share awards overseas and later come to the UK could be placed in a worse tax position than their UK resident colleagues, possibly suffering double taxation. Amendment 7 corrects that, and, with amendments 8 to 10, ensures that certain income received overseas is treated in the same way as similar UK income.
	Amendments 15 to 41 amend schedules 9 and 10 to extend the new tax relief for social investment, the SITR, to investment in social impact bonds, which are payment-by-results contracts between public sector bodies and service providers, and are an innovative way of financing better delivery of public services. The providers are often charities or social enterprises. The measures will support further increases in the number of social impact bonds by providing incentives to private individuals who invest in them. Tax relief will be available only where a company has been accredited by the Cabinet Office and secondary legislation providing details of the accreditation process will be laid in September.
	Amendments 44 to 66 will protect a new capital gains tax relief from abuse. Schedule 33, introduced by clause 283, encourages the creation and maintenance of employee-ownership trusts, under which all employees of a business can have a stake in its value, growth and success. One way it does so is by allowing full relief from capital gains tax to people who transfer their shares in the company carrying on the business to an employee-ownership trust. There are rules to ensure
	that the trust is for the benefit of all employees and that control of the business passes to the trustees before the relief is available.
	Clearly it would not be an effective use of public money to give the relief if a trust broke the rules soon after it was created, denying the employees, the business and the economy the long-term benefits of employee ownership. Amendments 44 to 66 therefore ensure that if the employee-ownership structure fails or does not abide by the rules for relief at any time during either the tax year in which the shares are disposed of or the following tax year, relief may not be claimed, and any relief which has been given will be withdrawn and the capital gains tax position will be restored to what it would have been if no claim had been made.
	I urge the House to support the amendments, new clauses and new schedules.

Catherine McKinnell: I thank the Minister for introducing the 60 or so proposals that the Government have tabled for consideration at the end of proceedings on the Finance Bill. [Interruption.] I hear some tutting behind me. The House will be relieved to hear that although I have a number of questions they relate mainly to new clauses 1, 5 and 6, new schedule 4 and amendment 2.
	I will start with new clause 1. It is important to take the opportunity to scrutinise what are fairly significant changes. They have been introduced by the Government at a fairly late stage in the Bill’s progress. Will the Minister comment on why that is the case? The measures were first announced in the autumn statement but the Government were still consulting on them some five months later while we were scrutinising the Bill clause by clause in Committee.
	Perhaps the most controversial of the Government’s announcements on North sea oil and gas over the past year is contained in new clause 1 and new schedule 1, which make changes to the UK continental shelf oil and gas fiscal regime. As the Minister set out, they relate specifically to leasing arrangements between oil and gas contractors and oil and gas licence holders on the UK continental shelf—arrangements that are commonly known as bareboat chartering. Oil and gas service companies often lease drilling rigs, vessels and other equipment from overseas related parties on a bareboat basis—that is, without operating personnel—and the associated rental costs are claimed as a deduction against the UK profits of the service company when it uses the equipment to provide services to oil and gas licence holders on the UK continental shelf.
	As the Red Book sets out,
	“the government is concerned about the use of”
	such leasing arrangements
	“to move significant taxable profit outside the UK tax net”.
	I would be interested to hear from the Minister what estimate his Department has made of the total taxable profit that has been moved outside the UK tax net as a result of these leasing arrangements. More importantly, what evidence does HMRC have that such profit shifting or transfer pricing is avoidance activity, as the Government seem to suggest?

Malcolm Bruce: When the Minister is answering those questions, I wonder whether he will also say what impact the measures will have on drilling activity in the UK.

Catherine McKinnell: The right hon. Gentleman raises an important question. I hope that the Minister addresses it in his response. I will come on to that issue.
	In May, a Reuters report on these measures suggested that HMRC had
	“allowed an industry with annual revenues of 2 billion pounds to pay almost no corporation tax for two decades”.
	It also suggested that such arrangements have allowed drilling operators in the North sea
	“to operate almost tax free for 20 years or more”.
	It would be useful to know why the Government are acting now on those arrangements. I hope that the Minister will elaborate on that.
	The Chancellor made an announcement in last year’s autumn statement that appears to have come as a surprise to many. He proposed the introduction of a cap on the deduction that is available to UK service companies on bareboat charters from connected companies. He also announced plans to ring-fence profits from other business activities so that the taxable profit could not be reduced by other tax losses. It appears that, because of the considerable lack of consultation before those announcements were made, the Government have significantly altered the plans to take account of the views of the industry.
	The final proposals that are before us today will introduce a cap on the amount that service companies can deduct from their taxable profits through such leasing arrangements. The leasing deduction will be limited broadly by reference to a cap of 7.5% on the original cost of the asset or equipment. The cap was originally set at 6.5% but has been changed following the extensive consultation with the industry. Again as a result of the consultation, the cap will apply only to drilling rigs and accommodation vessels, which are otherwise known as “flotels”.

Michael Weir: I am listening carefully to what the hon. Lady is saying. Does she agree that, although the cap applies only to drilling rigs and accommodation vessels, drilling rigs are the crucial matter? There is a worldwide shortage of drilling rigs, so the cap might mean that they are used elsewhere, rather than in the North sea.

Catherine McKinnell: The hon. Gentleman raises an important point. Again, it would be helpful if the Minister addressed that concern in his response. I will come on to that matter a little later.
	New schedule 1 introduces a new form of ring fence that is similar to that imposed in respect of ring fence corporation tax for companies that operate on the continental shelf. The ring fence will be applicable to the composite activity that is the subject of this measure. That means that, although profits within the ring fence will only be taxed at the standard corporation tax rates and not the higher rates that apply to oil and gas producers, it will no longer be possible to reduce those profits through other tax reliefs that are derived from activity outside the UK continental shelf.
	To summarise, lease rental payments will be capped at 7.5% of the original cost of the asset being rented, and even those capped rental costs may be offset only
	against profits that arise from activities outside the ring fence. The tax information impact note suggests that those changes will yield £135 million to the Exchequer this financial year, with similar revenue yields—slowly declining—forecast for the next four years.
	I understand that the measures have changed substantially from those originally set out in December, following what was—quite rightly—an extensive consultation with the industry. Although the Opposition support any attempt to clamp down on tax avoidance, there still seem to be substantial concerns about those measures from within the industry, particularly regarding how the Government have approached the changes, as well as what impact they will have on an industry that makes a vital contribution to the public purse and, of course, the UK’s energy security.
	On the Government’s approach, I remind the House of the last time the Chancellor made significant changes to the UK continental shelf fiscal regime, which was described by the Financial Times as “clumsy”, and
	“handled in the least helpful way possible.”
	In Budget 2011, the Chancellor announced an increase in the supplementary charge—an additional tax on ring-fenced profits from oil and gas extraction—from 20%, which was the rate set by the last Labour Government, to 32%—a 12% increase. He argued that any tax increase was in the interests of fairness and cited rising oil prices, but in reality the Chancellor needed to raise revenue to pay for the delays in planned fuel duty rises, and scrapping the fuel duty escalator.
	In the autumn statement last year, the Chancellor announced major changes to the oil and gas fiscal regime—effectively tax increases on both occasions—without any prior discussion with the industry. As my hon. Friend the Member for Bristol East (Kerry McCarthy) pointed out at the time, the charge was
	“poorly targeted, has potentially serious unintended consequences for the industry, and is certainly not a policy that they got “right first time”, and all because the Government did not consult on their decision.”—[Official Report, 3 May 2011; Vol. 527, c. 600.]
	In 2011, HMRC conceded that the increase in the supplementary charge would risk the economic viability of some marginal oil fields. We therefore tabled an amendment to last year’s Finance Bill, calling on the Government to conduct a proper review of the impact of the tax increase. The tax information impact note for those measures states:
	“The measure could increase the day rates by up to 10% on new contracts for drilling rigs and accommodation vessels”,
	yet goes on to suggest that such increases will be “insignificant” to companies—those on the UK continental shelf may disagree. The final sentence of the tax information impact note states that the Government will review the impact of those measures in a year’s time—perhaps a tacit acknowledgement that they could be more detrimental than the Government’s optimistic assessment seems to suggest.
	Considering the many similar concerns about the impact that the changes will have on certain fields and their economic viability—including from within the Treasury—I would be grateful if the Minister would inform the House how many fields, already marginal, his Department has estimated will become uneconomically unviable as a result? Considering that such assessments were carried out in 2011, presumably they have also been made on this occasion.
	When the Government increased the supplementary charge in the 2011 Budget, The Times reported that big oil firms such as Statoil and Centrica were freezing their investment decisions—reportedly worth more than £6 billion—or temporarily closing fields as a result. Again, there are concerns in the industry that if the additional tax costs are passed on in higher day rates—and many, including the Government, expect that they will be—that will lead to higher exploration costs in the sector as a result of the increased cost of renting drilling rigs.
	As Oil & Gas UK has pointed out, driving drilling rigs out of the UK continental shelf may only compound the problem of low levels of exploration and production. As the Wood review recently identified, exploration is now at a critically low level. Even more worryingly, production fell by 38% between 2010 and 2013.

Robert Smith: The hon. Lady is making an important point: maximising exploration is crucial to future revenues. Unless oil is produced out of the ground, we will not see any tax revenue.

Catherine McKinnell: That is an ambition that I believe the Chancellor has expressed himself. It is vital the Government get this right and that is why we are asking these questions today. I hope we will receive reassurance from the Minister.
	Production fell by 38% between 2010 and 2013, which is the equivalent of 500 million fewer barrels of oil being produced. Critically low exploration has meant that 150 million fewer barrels of oil equivalent have been discovered in the past two years.
	This clearly has wider implications for the UK’s oil and gas sector. As the hon. Gentleman points out, it also has serious implications for the Exchequer. Just yesterday, there was a report in the Financial Times highlighting the fact that North sea oil and gas tax receipts decreased by 60% in the past two years alone, and are now at their lowest level since 2004. Some of that can be accounted for by significant investment in the past few years—the fiscal regime was designed in such a way, under the previous Labour Government, to encourage such activity and therefore be less liable to tax—but these figures are still reflective of the wider issues facing our North sea oil and gas sector, as I outlined previously.
	I want to draw the attention of the House to concerns, expressed by numerous tax specialists, that these measures represent the Government abandoning the application of the arm’s length principle in determining transfer pricing in the oil and gas sector. Just to explain the background, OECD member countries have agreed that to achieve a fair division of taxing profits, and to address international double taxation, transactions between connected parties—for example, intra-group companies—should be treated for tax purposes by reference to the amount of profit that would have arisen had the same transaction been executed by unconnected or independent parties. The arm’s length principle is enshrined in article 9 of the OECD model, treaty or convention.
	The Government apparently support the arm’s length principle, but the Chartered Institute of Taxation has expressed concern that imposing such a cap, as new schedule 1 would provide for, calculated through a
	formula based on the original cost of the asset, effectively imposes a legislatively fixed benchmark price that overrides the arm’s length principle. An article for
	Tax Journal
	in February highlighted this issue and concluded:
	“these measures are reflective of the Treasury’s willingness to introduce special measures where it perceives that the application of the arm’s length principle fails to determine an appropriate allocation of profits in cross-border transactions.”
	Will the Minister say whether this reflects the Treasury’s willingness to intervene and override the arm’s length principle, where it deems the application of such to be inadequate? The main reason why the Government’s abandonment of the arm’s length principle is of such concern is the possibility that other countries may follow suit and introduce their own special measures; something that the OECD and its members, through the arm’s length principle, are at pains to prevent. It would be useful to hear from the Minister whether the Government have taken account of international reactions to these measures and their potential detrimental impact.
	As the Minister well knows, and as we have put on the record in this House on countless occasions, the Opposition support the Government on any steps they take to tackle tax avoidance. However, a number of concerns remain as to how the Government have approached implementing these measures. We welcome the Government’s consultations with the industry, belated though they are, but I would be interested to hear from the Minister whether he and his officials believe that they have, in the final version of the Bill, fully addressed the concerns of industry. The feedback I have received from the industry suggests otherwise.
	After the debacle of the autumn statement last year with regard to this unexpected announcement, Ministers have finally, three years after they made the same mistake, learned the lessons of turning to the North sea oil and gas industry to plug holes in their books, and coming up with policy on the hoof. In 2011, we saw the detrimental impact such unilateral action can have, particularly in an increasingly marginal industry—that was, perhaps, reflected in the Financial Times report yesterday. We can only hope that the Government have fully considered the impact of the latest changes and properly accounted for them. Finally, the measures seem to diverge from the Government’s general approach to transfer pricing and the arm’s length principle, but I hope the Minister can provide clarification on that.
	New clause 5 and new schedule 4 provide for further tax relief for the creative sector—based, of course, on the last Labour Government’s highly successful film tax relief. They introduce a tax relief for theatrical productions, and the relief will operate in almost exactly the same way as it does for high-end television and animation productions, but with one small difference. It allows qualifying companies engaged in theatrical productions to claim an additional deduction in computing their taxable profits. Where that additional deduction results in a loss, they have to surrender it for a payable tax credit. Both the additional deduction and payable credit are calculated on the basis of UK core expenditure capped at 80% of total core expenditure by the qualifying company.
	The Minister set out the provisions in some detail, and they received some welcoming comments, particularly from Government Back Benchers, but I have a few queries about the new relief; I hope the Minister will be
	able to resolve any outstanding ones. The first relates to measures contained in new schedule 4, and it is important to ensure that the measure is not open to abuse. Such reliefs as these—or tax expenditures, to use Treasury-speak—well-intentioned though they are, have increasingly come in for criticism from the Public Accounts Committee and the National Audit Office. We have already discussed the number of both known and potentially unknown tax avoidance schemes generated around the reliefs and the subsequent criticism of them. I do not think it would be helpful to hold this discussion again here on the Floor of the House; Members will be able to read the
	Hansard 
	to see the extensive debates and discussions we had in the Public Bill Committee.
	Following the consultation process, the Government appear to have taken on board the views of the Chartered Institute of Taxation, which suggested in its consultation submission that any evidence of abuse should be promptly identified and acted on by using the general anti-abuse rule. New schedule 4 provides for a general anti-abuse rule based on the GAAR, but the Chartered Institute of Taxation suggested that this tax relief should be properly monitored and reviewed by the Government. The Government’s consultation response suggests HMRC will “continue to monitor” for abuse, but can the Minister give a specific commitment in this respect?

Ian Swales: Does the hon. Lady join me in welcoming the fact that the arrangements in HMRC are to give specific permission on a production-by-production basis? I hope that HMRC will be staffed up accordingly, but that should avoid some of the abuses that took place under the previous film arrangements.

Catherine McKinnell: I hope that will happen and that HMRC will have the resources available to it, as we know that it has faced significant reductions in staffing. That does not necessarily mean that it will not be able to undertake the sort of monitoring we would like to see under the scheme, but it would be useful to hear from the Minister that HMRC has the resource, capacity and systems to ensure that this does not become just another vehicle for tax abuse.

Helen Goodman: In the case of the film tax credits, the British Film Institute has a role in assessing whether the criteria are met, and it obviously has great expertise in that area. It would be helpful to know whether this work is going to be contracted out in any way or whether any particular expertise is needed by Revenue officials in doing this job.

Catherine McKinnell: My hon. Friend raises a very important point. I have not specifically considered it, but it fits well with some of the additional concerns put to me, which I am now putting to the Minister, about defining who should qualify for the relief and how it should be assessed by HMRC. It would be interesting to hear whether consideration has been given to using the expertise of outside bodies to ensure that HMRC gets its assessments right first time in administering this tax relief.
	In the light of the National Audit Office’s recent report that HMRC monitors just 10% of its “tax expenditures”—there are more than 1,000—it would be reassuring if the Government committed themselves to
	reviewing the operation and take-up of this tax relief each year to ensure that HMRC is fully aware of how it is being used, and, more important, whether it is being abused.
	My second query relates to the interaction of not-for-profit productions, which are often registered as charities, and this tax relief. In its press release on the publication of the consultation document in March, Arts Council England pointed out that the majority of theatre productions which receive funds from it are registered as charities, not companies, and are therefore not liable for corporation tax. It seems that such concerns were also raised throughout the consultation, with many wondering how the numerous not-for-profit productions to which this tax relief would be hugely valuable would still be able to benefit. The press release suggested that such registered charities would have to set up a trading subsidiary in order to benefit from the tax relief.
	The Government’s response to the consultation, which I believe was published last week, noted those concerns and suggested that the Government had worked closely with stakeholders to ensure that such charities could benefit without incurring significant additional administrative costs. However, it remains unclear whether Arts Council England’s suggestion about the setting up of trading subsidiaries is the Government’s favoured approach. The document merely states that HMRC intends to publish “comprehensive guidance”. Clearly, in the light of recent reports from the Public Accounts Committee and the National Audit Office, the right balance must be struck between making this welcome relief available to those at whom it is aimed, and ensuring that such well-intentioned reliefs are not open to widespread abuse. I hope that the Minister will be able to provide some clarity and reassurance.
	Let me now say something about the definition of “touring productions” for the purposes of a payable tax credit. As the Minister helpfully explained, two levels of tax credit are available to touring productions that surrender their losses—if they have losses, of course—in order to give further incentives to the bringing of productions to areas that are, as the response puts it, “under utilised”. If a production does tour, an enhanced rate of tax credit is available, amounting to 25% of losses surrendered. For all other productions—those that do not tour—the payable tax credit is 20%.
	The Government’s consultation response indicates that they have changed the definition of “touring production” following suggestions that many smaller productions do not present as many as 14 performances in a single venue, or perform the same show in 12 different venues, which were the previous criteria. The Government have now decided that productions are defined as “touring” if they meet one of two criteria: they must either perform in at least six separate premises or present at least 14 performances in at least two different premises.
	It is the second criterion that has caused concern, because it remains unchanged even following the consultation. I should be interested to hear the Minister’s justification for that. The Government have clearly responded to concern about the number of different venues on a tour, but perhaps he can explain the thinking behind the classing of a production as being “on tour” if it performs in just two different venues. Even if it puts
	on a number of shows at those two venues, I wonder if that really could be classed as a tour. What is to prevent a production from moving from one side of the road to the other, for example, in order to benefit from an enhanced tax credit?
	Concerns have also been raised by the National Centre for Circus Arts, which is worried about the definition of “theatre”. Although the word “circus” is specifically mentioned, the centre thinks that the definition is still too narrow to reflect the nature of many contemporary performances, not least those in circuses. It would welcome confirmation that all circus performances will qualify for the tax relief. It feels that the new clause refers to a dramatic production in which
	“the performers are to give their performances wholly or mainly through the playing of roles”.
	That wording could exclude a great many excellent shows which the centre feels that the Minister would want to encourage and which, in the nature of circus, showcase superb skills of dexterity and athleticism, but may not involve a narrative or character acting as we might understand it to be, in the context of a traditional play. Is the Minister prepared to provide some clarity and reassurance, or alternatively to meet the National Centre for Circus Arts to discuss how HMRC can best evolve the guidance that is supposed to flow from this Bill, and which people are still awaiting, to ensure that as wide a range of circuses that do not involve the use of wild animals are eligible for the relief? As has been said, circus originated in this country, and this new tax relief could help it grow internationally also.
	As the Labour party introduced this tax relief for the creative industry, we fully support another tax relief of a similar nature. However, there has been only a short time to reflect on the issue, and there are some outstanding queries, on which I hope the Minister will be able to give some reassurance.
	New clause 6 is on the exclusion of incentivised electricity and heat generation activities. It removes more renewables activities from being eligible for the enterprise investment scheme—although it still allows anaerobic digestion and hydro-power remain to be covered—unless carried out by a community company. This was announced a little while ago. It is worth reiterating some of the points we made on clause 53. We have a particular concern regarding the impact on investment in the renewable energy sector. New section 257MS explicitly rules out enterprises that benefit from Government renewables subsidies, including feed-in tariffs, renewable obligation certificates and the heat incentive scheme. Given the well-publicised need for alternative sources of energy, it seems very strange that the Government are content to disincentivise this activity, because it could result in a big slow down in investment in the renewable energy sector in Britain, and potentially jeopardise our chances of meeting European renewable energy targets and climate change targets. It could also limit the ability of communities to invest in localised renewable energy schemes.
	In addition, funds already invested in renewable energy projects may have to be returned. It has been estimated that, for anaerobic digestion alone, the sum is over £130 million. Considerable anxiety has been expressed over the past four years about this Government’s slightly erratic approach to renewable energy and renewable energy generation, so it would be helpful if the Minister could provide some reassurance in that regard.

David Mowat: Does the hon. Lady not think it right that we incentivise these renewables projects through contracts for difference and all the mechanisms the Department of Energy and Climate Change has brought forward rather than these sorts of EIS schemes? Therefore, it is rational to do what the Government have done, and that of itself should not make any difference to the propensity to go ahead with these things.

Catherine McKinnell: We would always hope that the Government would behave rationally in respect of these matters. I am pleased that the hon. Gentleman has absolute confidence in that, but I would be grateful if the Minister could provide some reassurance because the Government’s record on these issues has not always been entirely rational and I do not share the confidence of the hon. Member for Warrington South (David Mowat) in this regard.
	On follower notices and accelerated payments, amendment 2 inserts subsection (8A), which provides that if a tribunal finds that a penalty should not have been charged because it was reasonable for the taxpayer to continue his dispute, the follower notice on which it was based remains valid, as does any accelerated payment notice or partner payment notice related to it. Concerns have been raised that if a penalty is cancelled on the grounds specified in clause 207, the validity of the follower notice—or related accelerated payment notice or partner payment notice—is not affected by the cancellation of the penalty. HMRC has confirmed that the intention is that if the penalty is cancelled on other grounds specified in subsection (2A), the follower notice, and any related accelerated payment notice or partner payment notice, would be cancelled. That is clearly the logical result of a successful appeal against the penalty. However, a few questions have been raised about this, so will the Minister say in what circumstances the grounds of appeal in clause 207(2A)(d) might be used, and why if successful, the FN and related APN or PPN would not be cancelled? When will guidance be published on this and the rest of the legislation on FNs and APNs, bearing in mind how important the guidance will be in helping taxpayers and their advisers to understand how this legislation is intended to operate? When will HMRC be publishing a list of the disclosure of tax avoidance schemes that will be issued with an APN, as we know that there is a lot of concern about the implementation of some of the Government’s proposed changes? On that very technical note, I conclude my queries to the Minister and I look forward to receiving reassurances from him in his response.

Christopher Pincher: I welcome the chance to make a brief contribution to the debate on this group of amendments. It was a pleasure to serve on the Public Bill Committee with the Exchequer Secretary; it was certainly an educational experience for me. It was also a pleasure to serve with the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), although her professed determination to scrutinise the legislation line by line did at times make it feel as though she was scrutinising it word by word.
	I should like to speak briefly to Government amendments 1 and 2, which affect clause 207, encompassing clauses 192 to 212. As the Minister and the shadow Minister have said, those provisions deal with follower notices and the accelerated payments regime. I was
	heartened to hear that the Minister is spelling out the ground rules for appeal in respect of follower notices, but he will know that there remains some residual concern, to say the least, about the retrospective nature of accelerated payment notices.
	A number of people and their advisers have made what they believe to be a proper disclosure, particularly after the increase in the fine for non-disclosure from £5,000 to £1 million, erring on the side of caution and over-disclosing. They are concerned that they will now be caught up by that disclosure and will find themselves with retrospective tax liabilities, perhaps dating back to 2004. The Minister was good in Committee in making it clear that he would continue to consult the industry and taxpayers, because the original consultation was brief. I hope that he will do that, and will continue the dialogue with the industry and with taxpayers to ensure that nobody is caught up unfairly, having tried to do the right thing, by these proposals. I look forward to hearing him make the position clear in his remarks .

Stewart Hosie: I rise to speak against new clause 1 and the introduction of the bareboat chartering regime. I heard the Minister’s comment that this is about trying to get a fair tax return from this small but important sector. It tells us that at the moment it is paying about £200 million a year in tax and national insurance. At a yield of about £100 million, the tax return from this small sector will be increased by about 50%—that seems a substantial increase in a short period.
	I would like to say that this bareboat chartering regime was a one-off stand-alone bad measure, but it does not stand in isolation. It is part of a pattern of ill-judged, disjointed and sclerotic decisions that this Government have taken, and it typifies their attitude to the North sea. Some years ago, we had the massive hike in North sea corporation tax supplementary charge, which absolutely stifled investment and brought it to a grinding halt. That led the Government, in panic, to make some kind of correction through the introduction of a large series of complicated new and enhanced field allowances.

Michael Weir: My hon. Friend makes a very good point. Given that the Government have so recently and so enthusiastically embraced the Wood review, does he not think that it is an odd measure to introduce, as it will hit the maximisation of the recovery of our oil and gas reserves?

Stewart Hosie: That is an extremely good point. It is not just the International Association of Drilling Contractors that has welcomed the Government’s approach to accepting the full recommendations of the Wood review, but the overall trade body, Oil and Gas UK. Indeed, the Scottish National party thinks that it is a good thing, too. Both the industry and the SNP have also welcomed some of the field allowances that the Government were forced to introduce, particularly the ultra-high-temperature, high-pressure field allowance for mixed gas and oil fields. That kind of measure is incredibly sensible, but as my hon. Friend says, and as Oil and Gas UK points out, there is huge disappointment
	that the Government are continuing with the bareboat charter measure. They believe that it is ill-conceived and should have been dropped in its entirety. The backdrop to its introduction is a period in which operating costs have increased sharply. Last year’s cost increases of more than 15% led to an all-time record high of almost £9 billion in costs. I understand that new developments in the North sea are facing similar cost pressures, so it is illogical to introduce this measure at this point, especially as drilling rigs and accommodation vessels alone are included in the scope of the legislation.
	We are looking at a part of the sector where the return on capital is only 8% or 9%, and the cash break-even on a drilling rig or an accommodation platform is typically 15 years. These are large investments, with investors taking substantial long-term risks, and we cannot understand why the Government want to put that at risk at this particular point.

Michael Weir: My hon. Friend makes a very good point. Does he also recognise that there is a shortage of rigs? By applying this measure specifically to drilling rigs, we are adding another disincentive for investment in the North sea that would maximise our oil and gas recovery.

Stewart Hosie: Indeed; I recognise all those points, and the pressures that are being applied to finite and very mobile resources, such as rigs and accommodation vessels, but I will come back to some of that later.
	This measure not only penalises the drilling and accommodation vessel sector, but potentially impacts on the entire £35 billion upstream oil and gas supply chain. Derek Henderson from Deloitte UK said:
	“While it doesn’t affect operators directly, many expect that the costs will be passed on to them and could discourage drilling.”
	That would impact on the entire support and supply chain that is dependent on drilling activities.

Angus MacNeil: On the point about making other jurisdictions more attractive, are the Government not actually helping Scotland’s competitors by ensuring that rigs, of which there is a shortage, go to more sympathetic jurisdictions?

Stewart Hosie: Indeed, and Malcolm Webb from Oil and Gas UK made a near-identical point when he said:
	“It is perplexing…that the Government has chosen to proceed with the bareboat measure. This can only increase costs on the”
	UK continental shelf. He also said:
	“we fear that this move will drive drilling rigs, already in short supply, out of the UKCS.”
	That would be a ridiculous thing to do.
	What makes this measure all the more peculiar is that the bareboat charter arrangements are commercial arrangements that are widely used across a range of industries, and not just in the oil and gas sector. The arrangements we are talking about are used internationally, and have formed a consistent part of the UK continental shelf operation for 40 years. So why pick now to take an extra £500 million or £600 million out of the North sea over the next five years? The Treasury’s decision in the Budget to apply this measure only to the oil and gas industry, and only now, to a few specific vessel types, is utterly illogical.
	I do not want to detain the House too long, so I think that the key thing to do is to consider the points that the International Association of Drilling Contractors makes about the measure. This is not a gentle criticism of a mildly inconvenient tax; it is an excoriating critique of what the UK Government have done. The association says:
	“The measure is unfair and a unilateral deviation from international best practice…with no ability for contractors to reset prices,”
	it
	“amounts to retrospective and double taxation”,
	and in a real and practical sense, it does. It says:
	“The measure will depress economic activity. The…changes affect the cost base of the drilling industry”,
	with all the impact that might have. It goes on:
	“The measure targets a single, specialist sector for additional rent…Specialist international companies that have relocated”
	to the UK “will be particularly hit”, when they and their investment should be welcomed instead.
	The association argues:
	“The government has manipulated the introduction of the measure to avoid proper scrutiny.”
	In a particular criticism, it goes on to say:
	“It is not appropriate for legislation as complex as this to be published in initial draft form”
	on the day it was due to come into effect. That is a preposterous way for the UK Government to behave. The association continues:
	“The consequences of the measure have not been properly assessed by HRMC”,
	and it says that there are reports that up to £2 billion could be lost from the continental shelf. It also says:
	“The measure is deliberately discriminatory...all vessels bar drilling rigs and accommodation units have been exempted for reasons that are far from clear.”
	To put that another way, only two sorts of vessels remain included in the scope of the measure, which appears to be the usual sort of smash-and-grab cash raid that this Government make on the North sea.
	There appear to be a great many reasons why the bareboat chartering regime is wrong. There appears to be an illogicality about the way it is being introduced, as well as a complete lack of transparency and time properly to assess the long-term impact, not just on drilling rigs and accommodation vessels, but on the entire supply chain. Little concern appears to have been felt about the consequential impact on growth and jobs in the sector and in the economy in general. That is quite a scathing set of criticisms to make of this Government, although it is not unique and could apply to any number of other things that they have done.
	I look forward to hearing what the Minister has to say, but unless there is a very credible explanation of the amount of tax that he believes is lost, and of how the proposals will help, rather than having the consequences that I have described, I fear that we might divide on new clause 1.

Helen Goodman: I should like to speak to new clause 5 and new schedule 4 on the theatre tax relief and to set this in the context of the current state of British theatre.
	The Government’s own documents point out that the film tax credit introduced by the previous Labour Government has been a significant success. In answer to
	written questions from my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the Government have told us that the film tax credit has supported 1,200 films, provides 46,000 jobs, and has brought in £1 billion of investment. Obviously, therefore, a theatre tax relief is a good idea in principle, but it is worth considering whether the drafting of the new clause will achieve all the desired objectives. If it is not drafted sufficiently generously, the positive benefits to the theatre industry and to the British economy will not be achieved, but if it is drafted too loosely, it can become open to abuse. In either of those instances, we will have to come back and revisit the drafting, and the industry will face an unstable regime that is not helpful to its planning. In one respect, the drafting is a bit too loose and in another respect it might be a little too tight.

Nick Harvey: I strongly support the hon. Lady’s thesis that it is essential to get the wording right. At the moment, there seems to be a practice on the part of HMRC investigators to assume that any investment—certainly by private individuals taking advantage of this facility—is, by definition, improper. There is far too much of an assumption that people are on the fiddle. I share her view that it is an entirely valid form of tax allowance and that it is important to get the definitions absolutely bang on the nail.

Helen Goodman: I am grateful to the hon. Gentleman. It is slightly unfortunate that the Government have brought the new clause and new schedule to the House now, because this is the only opportunity we are going to get to scrutinise this.
	The object is obviously to support the development of British theatre and, in particular, to support touring. We have some of the best theatre in the world; we all know that. It all began with having the best playwright in the world. We have built on that over time, and our theatre is one of the major attractions for inward visitors and a major export industry. I point out to the Minister that we can draw a distinction—it is a little crude—between two parts of the current theatre industry. The commercial part is a series of chains of theatres producing successful, profitable plays that are often sold to New York and have very long runs, particularly in the west end of London.
	If the sole benefit of the tax relief was to make those companies more profitable, that would be very nice for them, but it would not achieve what the Minister is aiming for—namely, to support the development of the industry. We therefore need to look at whether the relief supports the part of the theatre that is not always profitable and is supported by the public purse. That is why the question that my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) asked about whether the allowance will be claimable by companies that are charities is very pertinent. Large parts of the subsidised theatre sector, the Minister hopes, will be getting a tax subsidy instead of a public spending subsidy; I appreciate that that is his aim. However, that will not happen if their legal structure is not in line with what the Bill provides for. It is rather disappointing that we are being asked to agree this primary legislation when the guidelines on the definitions have not yet been published and so it has not yet been possible for them to be scrutinised by people in the industry who understand this very well.
	To take a concrete example, the National Theatre is a publicly supported theatre, and the publicly supported theatre, by and large, is more innovative, more adventurous, puts on more new productions and, as some might say, is more interesting. That theatre has a wider portfolio of riskier and more different productions, and sometimes, some of them turn out to be extremely popular and can transfer into the commercial sector. The most obvious recent example is “War Horse”, which has done very well indeed. It started at the National, it went to the west end and now it has been on in New York as well. We obviously want more of that.
	The Minister must tell us more about who can claim the relief if he is to convince us of its effectiveness. He also needs to understand that we will not accept that it completely cancels out the effect of the public spending cuts that the present Government have imposed on the theatre. Yesterday, Arts Council England announced its new set of national portfolio organisations; it has had to cut the number because the Department for Culture, Media and Sport has taken a £70 million cut.

Jenny Chapman: My hon. Friend has spoken about how the changes might apply to the National Theatre. Is she intending to move on to talk about regional theatre and how those changes may or may not benefit somewhere such as the Darlington Civic Theatre?

Helen Goodman: I am, because I know that my hon. Friend has a keen interest in that, as do people up and down this country.
	So we have had big cuts to the Arts Council. The Government have also imposed big cuts on local government, and from answers that I have received to freedom of information requests, we now know that on average local authorities are cutting their arts provision by even more—some 14%. So, given the estimates in the Red Book of the value of this tax relief rising from £5 million to £20 million per year, we can immediately see that it does not compensate for the reductions that have been experienced in public support.
	My hon. Friend is right: there is a big issue about what is going on in the regions. The “Rebalancing our Cultural Capital” report suggested that the Government were supporting cultural institutions to the tune of 14 times as much per person in London as elsewhere, and that is not conscionable in the long term for this country. It is clearly because of that concern about regional imbalance that the Minister has decided to provide a slightly more generous relief for touring.

Simon Kirby: Will the hon. Lady be very clear: is she opposed to the cuts in the DCMS, and if so, would Labour reverse them?

Helen Goodman: I think it must be a matter of regret to everybody in the House that DCMS has taken 36% cuts. Of course, the question whether they can be restored is, as the hon. Gentleman knows, a completely separate question. I am just pointing out that the tax relief, if the legislation is properly drafted, will not cancel out the effect of those cuts. I am hoping that no one on the Government side is trying, through some sleight of hand, to give such an impression.
	To return to the point that my hon. Friend the Member for Darlington (Jenny Chapman) raised, it is my understanding that in Darlington, the theatre is what is called a receiving house. That means that new plays are not being made in Darlington. Companies come on tour to Darlington and their productions are shown for several days. There are many very good producing houses in the regions as well; one good example would be the Nottingham Playhouse, where they make plays and tour them, and sometimes they tour them to London—they have just had something on at the Almeida.
	A receiving house will not get the benefit of this tax relief; it is the producing company that gets the benefit. Of course, it may be that if they get the tax relief or the tax credit, they could offer the production to the receiving house for slightly less money, which might ease the situation in a place like Darlington, but there will not be a direct benefit, as I understand it.
	My next question is whether the definition of touring is the right one and whether the measure will address the regional imbalance. As my hon. Friend the Member for Newcastle upon Tyne North pointed out, it is completely sensible to say that the extra relief is given if the play is taken to more than six places, but we must question whether 14 productions in two places is an appropriate definition of touring. Some of those who responded to the Government’s consultation said it would be a good idea to have a geographical definition of touring, and I do not understand why the Minister has not done that. I think he is risking some revenue leakage on this point. To give a concrete example, a play could be on on one side of Shaftesbury avenue for 14 nights, then move to the other side of Shaftesbury avenue for 15 or 25 nights and it would benefit, but the Government would not have achieved their policy objective of ensuring that the theatrical experience took in a new, wider audience.
	I think there is a problem and I am disappointed by the way the Minister has drafted the provision; it is a weak spot. On the other hand, he might be being too restrictive in the number of production companies that can benefit, although we do not yet know how the guidelines will operate. In principle, of course it is a good idea to support British theatre. It is a great industry, we are very good at it and we have some of the best actors and theatre companies in the world, so in principle, it is a good idea to have a theatre tax relief, but I do have those two questions about those two parts of the new clause and the schedule.

Aidan Burley: I have a couple of questions for the Minister about the accelerated payment of tax and avoidance cases. I have written to him about this and received a letter from him, and also met him subsequently. Others have mentioned this issue, which has caused a lot of concern, especially within the accounting community. Many of my constituents who are accountants and who run businesses have written to me and met me to voice their concern about what they believe is retrospective legislation, with no right of independent appeal. I hope the Minister will be able to reassure my constituents and those of other Members.
	The first question is about the oft-quoted 80% success rate in tax avoidance cases tried at court. The Minister has quoted that statistic, and HMRC has quoted similar figures, but we have yet to discover the source of that
	statistic, nor do we have a list of the cases on which it is based. Many of those who have contacted me feel that the figure is unsubstantiated. Will the Minister tell us the source of that 80% success rate statistic?
	Secondly, there is a strong view that this law is being implemented retrospectively, with no right of independent appeal. I know the Minister has said it is not retrospective legislation, but he knows that that opinion is not shared by the accountancy profession, the legal profession, the CBI or even the Treasury Select Committee. Will he comment on that?
	It is predicted that the legislation will result in some 150,000 redundancies, and the loss of future tax revenues from companies going to the wall, including some in my constituency, is estimated to be £50 billion, all to collect a mere £4 billion in unpaid revenues over the next five years. That seems to me to be a very bad bang for your buck. Does the Minister believe it is worth such loss and unemployment?

David Gauke: We have had, unsurprisingly, a wide ranging debate. I shall try to respond to the points raised by hon. Members in our debate, starting with those relating to new clause 1 and new schedule 1 on oil and gas. I outlined the measure in my opening remarks, and a number of questions have been raised. The question that gets to the heart of the matter concerns the impact on drilling activity and how that affects the UK’s competitiveness.
	The Government’s support for the sector over the past few years through field allowances and decommissioning relief certainly has helped to encourage record levels of investment—£14.4 billion in 2013 alone—and supported the market for rigs in the UK continental shelf, where rates are driven by demand. Rig rates in the UK are among the highest globally, so we are not convinced that this measure will drive rigs from the UK continental shelf. In fact, recent press coverage indicates that rigs continue to be attracted to the UK continental shelf after the measure’s introduction.
	In addition, the Government do not accept that they should seek to address the issue of rising costs by accepting an unfair tax system where a small group of companies are able to pay almost no UK tax. The new oil and gas authority which the Government announced as part of their implementation of Sir Ian Wood’s recommendations will aim to identify ways to ensure that Government and industry can work together to address cost escalation.

Stewart Hosie: That is a valid point to make, but having had the chartering regime in place in the North sea for 40 years, why introduce change now and why restrict it to rigs and accommodation vessels, affecting only one industry?

David Gauke: On the question why now, it is worth pointing out that following a refocusing of the UK corporation tax regime to a more territorial basis over recent years, and in view of increasing recognition, through the base erosion and profit shifting OECD initiative, that transfer pricing and other international rules do not always provide a fair or consistent outcome, the Government have decided that the need to protect the tax take from those who benefit indirectly from the exploitation of the UK’s natural resources requires domestic action now.
	In addition, recent Government incentives have resulted in record investment in the UK continental shelf. It is right that action is taken to ensure a fair amount of tax from activities carried out in connection with the exploitation of the UK’s natural resources, and HMRC ensures that all businesses pay the tax due in accordance with the tax law.

Brian H Donohoe: I have a constituent who is on a ship that serves the North sea. He is the only member of the crew who has had his national insurance contributions changed in the last round. He is an electrical engineer. The mechanical engineer, the captain and the bosun are still on the old rate, but the electrical engineer is not. Can the Minister explain to me why an electrical engineer is being discriminated against on a North sea supply vessel?

David Gauke: The hon. Gentleman raises a somewhat different point from the one that I am addressing, but if he writes to me in respect of the individual case—[Interruption.] If he has already written to me, I am delighted to hear that. HMRC may be better placed to respond to the particular case, but we are taking action in respect of intermediaries to ensure that the national insurance contribution system works fairly. This is another area where we are making sure that businesses that benefit from our natural resources make a fair contribution in tax.
	With regard to whether evidence of profit shifting constitutes tax avoidance, this measure is designed to provide a fair amount of taxation for activities carried out in connection with the UK’s valuable natural resources. The current arrangements result in significant profits from activity on the UK continental shelf moving out of the UK tax net. This measure is designed to prevent that. As for the argument that it could result in a loss of tax revenue, we expect it to raise £535 million over the scorecard period, on revenues of £1.75 billion, and that has been certified by the independent Office for Budget Responsibility.
	We do not expect this measure to result in a decline in activity. The Government are fully committed to supporting investment in oil and gas. The work that we are doing with the industry, for example by introducing new allowances and providing certainty on decommissioning relief, as I mentioned earlier, has helped unlock billions of pounds worth of investment in the UK. That is the right way to support investment. I do not think that the right way would be to accept an unfair tax system that allows some highly profitable companies to pay almost no tax in the UK; there are better ways to ensure that we are competitive in this area.
	With regard to the concern that this measure is somehow being rushed through, the Government have consulted widely with industry. Unlike many measures aimed at correcting unfairness, this one was not introduced with immediate effect in the autumn statement. We welcomed the industry’s responses to the consultation, which resulted in a number of changes to the approach adopted. As a result of the evidence received, the scope of the measure has been limited to drilling rigs and accommodation vessels and we have increased the deduction cap. We have also announced that we will review the measure in a year.
	With regard to the concerns over fiscal stability, the tax rules that apply to contractors have been in place since 1973, and I think that we must look at this in that context. I think that it is right that we correct an unfairness. The Government are aware of the concerns about exploration, which is why the Chancellor announced in the Budget that one of the new oil and gas authority’s first tasks will be to report on how we can encourage exploration. The new allowance for ultra-high pressure, high temperature clusters, which was also announced in the Budget, is being designed specifically to incentivise exploration activity around new developments.
	I do not accept that an unfair tax system that allows some highly profitable companies to pay almost no corporation tax in the UK is necessary to boost exploration. We are seeing no evidence of projects being cancelled. We are aware that there are marginal projects on the UK continental shelf, but that is why we have introduced the field allowances. That is the correct way to maximise economic recovery.
	The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) asked about setting aside the arm’s length principle for transfer pricing. The UK remains committed to the arm’s length principle. At the heart of transfer pricing is the requirement to find the price that would arise at arm’s length. However, very few transactions of the type targeted by this measure take place between unconnected parties. That gives rise to uncertainty over the allocation to specific jurisdictions of the overall global profits made by the contractor. I hope that those points of clarification on the matter are helpful.
	A number of questions were asked about theatre tax relief. Let me seek to answer them. Members raised concerns that the relief could be abused and asked whether we will review the measure in future. We consider that effective anti-avoidance rules are critical to the long-term success and stability of theatre tax relief, a view that I think has been expressed on both sides of the House. The Government will include rules similar to those applied under film tax relief to prevent artificial inflation of claims. In addition, there will be a general anti-avoidance rule, based on the general anti-abuse rule, denying relief where there are tax-avoidance arrangements relating to the production. Of course, HMRC will monitor for abuse once the regime has been introduced.

Simon Kirby: Is the Exchequer Secretary any clearer than I am about whether the Labour party will reverse the cuts to the Department for Media, Culture and Sport, because I am still not sure whether it intends to or not?

David Gauke: I am grateful to my hon. Friend for another example of Labour opposing yet another measure that this Government have taken to try to reduce the deficit. At least Labour Members did not make another spending pledge on this occasion, but we will, of course, continue to monitor their remarks very closely because they frequently do make spending pledges. [Interruption.] Perhaps the presence of the shadow Chief Secretary, the hon. Member for Nottingham East (Chris Leslie), has instilled some uncharacteristic discipline in Labour Front Benchers.
	Let me turn to the question of why some circuses are excluded and some points of definition. With the exception
	of the named exclusions, other types of performing arts can benefit, provided that those giving the performance can demonstrate that they are wholly or mainly playing a role and that each performance is live and that the presentation of live performance is the main object, or one of the main objects, of the theatre production company’s activities. The Government believe that using that definition, which considers the nature of the performance, is more appropriate than listing types of performing arts. In cases where further clarity may be required, companies should seek professional advice or contact HMRC. On the subject of HMRC, I was asked about its resources. The House may be pleased to know that a specialist unit has been provided to assist businesses with making claims under this relief.
	The definition of “touring” has been raised and whether more should be done in terms of relating it to geographical location. A production can qualify as “touring” if there is an intention to perform at six or more separate premises or to present 14 performances in two or more premises. The hon. Member for Bishop Auckland (Helen Goodman) is right to say that we considered alternative definitions of “touring,” including the use of geographical restrictions, but we believe that our definition provides a simple and effective way to support the range of types and sizes of tours that take place. That is why we have gone with that definition.
	On the question whether this will cause a significant administrative burden for charities or not-for-profit theatre companies, minimising complexity and ensuring straightforward compliance was one of the central considerations in designing the relief. That is why we are basing it on the film tax relief model, which is also used successfully for other creative industry tax reliefs. We have worked closely with industry in determining the design of the relief, to ensure that it works for the industry, particularly the not-for-profit sector. Officials continue to engage with industry, including by attending events to help and advise in the run-up to companies starting to make claims in September. Ultimately, detailed guidance will be published on the HMRC website to ensure that companies and charities get the support they need.

Mark Field: Is it the Treasury’s intention, for the sake of simplicity and certainty, to ensure that the definition of “touring” is a nationwide one? In central London, which has a lot of theatres, it would be very easy to suggest that performing in only two or three theatres would not be a tour.

Lindsay Hoyle: Order. It is not good for Members just to walk in and intervene, in fairness to those who have been here throughout. I know that the hon. Gentleman has a great interest in this issue, but may I ask Members to please not just walk in and intervene? I am sure, however, that the Exchequer Secretary would like to take the question on board, because it is such a good intervention.

David Gauke: I will do so, Mr Deputy Speaker, because my hon. Friend makes an interesting point. I have set out the definition of touring. We think that the right approach is to use that definition, for the sake of simplicity, rather than to try to come up with something more complicated.
	A question was asked about how a business not subject to corporation tax can qualify for relief. The new relief is available only to companies subject to corporation tax: it is a corporation tax relief. As I have said, it is modelled on the successful reliefs that already exist for the creative sector, and it is designed to give the relief to producers while minimising the scope for abuse. The Government recognise that not-for-profit companies make up a valuable and substantial part of the theatre industry, and we are confident that the sector will be able to access the relief without significant additional administrative burdens. A concern was expressed about whether setting up a trading subsidiary is complicated for charities. As I have said, we have tried to minimise complexity, and we have based the relief on what is already in place. We believe that charities will get the support they need.

David Mowat: Will the Minister give way?

Lindsay Hoyle: A man who has been here all the time.

David Mowat: I have, indeed, been here all the time, Mr Deputy Speaker.
	The hon. Member for Bishop Auckland (Helen Goodman) asked whether the relief will apply to blockbuster successes, such as “Les Misérables”, on which massive amounts of money are made. Indeed, the return on capital for such ventures is far higher than that for contractors in the North sea. Can the Minister give us any assurance that the relief will not be disproportionately skewed towards such companies?

David Gauke: The point is that the relief is designed to support the range of theatre productions across the UK, in both the subsidised and commercial sectors. We worked closely with the subsidised sector when developing the policy, and we are confident that it will benefit from the relief.
	Let me turn to the points made about measures to deal with tax avoidance schemes, including the accelerated payments regime and follower notices. My hon. Friend the Member for Tamworth (Christopher Pincher) asked whether taxpayers who have not used a true tax avoidance scheme will be caught, perhaps with a precautionary notification having been made under the DOTAS regime. Any unintended consequences for compliant taxpayers will be minimal. Where the taxpayer has used a relief correctly, but a DOTAS disclosure has been triggered, there would not normally be any tax in dispute, and there will therefore be no accelerated payment. If a taxpayer has used a relief largely as intended, but some elements are disputed, then an accelerated payment—if one is required—would be confined to the disputed elements. Let me be clear that the accelerated payment is the amount of tax that the taxpayer can expect to pay if their avoidance fails, taking account of their overall tax position. It is not some arbitrary amount, as has been alleged by those who have tried to discredit the measure.
	My hon. Friend asked whether the measure will be retrospective in effect, as did my hon. Friend the Member for Cannock Chase (Mr Burley). We had an extensive debate on that point in Committee, and the Committee reached a sensible conclusion, but let me set out the issue again. The measure is not retrospective. The rules about whether the taxpayer’s scheme does or does not
	work and about the amount of any tax liability will not be changed. The taxpayer would have already paid the money had they not entered an avoidance scheme. The taxpayer can continue to dispute the case, and will be paid back with interest should they win. We are not restricting people’s rights. Prudent taxpayers should recognise that tax avoidance carries a significant risk of not working and that the tax might become payable, so they should make plans for such an outcome.

Christopher Pincher: My hon. Friend is being very generous with his time. I am pleased that he has made the position clear. Will he also make it clear that he will continue the dialogue with the tax advice industry and with taxpayers who are concerned about the issue? The Treasury Committee has described the measure as a retrospective piece of legislation. I know that he has received representations from the noble Lord Flight, and I trust that he will also take those on board.

David Gauke: I have received a number of representations on the matter, but I have been clear as to why the Government do not consider the measure to be retrospective. It is right that in these circumstances the disputed tax should be held by the Revenue.
	The hon. Member for Newcastle upon Tyne North asked about the grounds for a penalty appeal. We have introduced amendments to provide extra clarity on that. They separate cases in which the penalty is cancelled because the notice should not have been issued from those cases in which the notice was appropriate but the taxpayer has reasonable grounds to continue the dispute—for example, because they could reasonably argue that different grounds are relevant. Then it will be for the tribunal to decide. HMRC is on course to publish the guidance and the DOTAS list in time for Royal Assent.
	To answer the question from my hon. Friend the Member for Cannock Chase about the follower notices, there is no appeal against the requirement to pay the accelerated payment. That would simply substitute one dispute over the substance of the scheme for another. HMRC is not making a decision about whether the avoidance scheme works, which would have full rights of appeal, and the rules do not change that situation; rather, the requirement imposed on the taxpayer relates solely to the timing of the payment. If payment of the tax is a problem because the taxpayer cannot afford the full amount immediately, HMRC will use its normal approaches, including appropriate payment arrangements.
	The source for the HMRC success rate of 80% is the list of tribunal and court decisions. Those decisions are all published and people can read for themselves HMRC’s continued success in these cases.
	The hon. Member for Newcastle upon Tyne North asked whether we are withdrawing support for investment in renewables. The change we are making is not an attack on renewables. It will simply end double subsidy of companies that are at lower risk because they will benefit from Department of Energy and Climate Change support, and will ensure that the venture capital schemes remain well targeted and operate in a fair and sustainable way. The Government continue to support the renewables sector more generally and have set out the amount of support we will allocate to low-carbon generation up to 2020-21, when it will reach £7.6 billion. The Government continue to offer generous incentives to the sector.
	The hon. Lady asked whether funds already invested in renewable energy schemes will have to be returned to investors. I can reassure her that new clause 6 will have effect only for shares issued by companies on or after Royal Assent to the Bill. Existing schemes and investors will not be affected by the changes.
	With those points of clarification, I hope the House will support the proposals.

Question put, That the clause be read a Second time.
	The House divided:
	Ayes 301, Noes 7.

Question accordingly agreed to.
	New clause 1 read a Second time, and added to the Bill.
	Proceedings interrupted (Programme Order, 1 July).
	The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 2
	 — 
	Determination of beneficial entitlement for purposes of group relief

‘(1) CTA 2010 is amended as follows.
	(2) In section 169 (interpretation of provisions to determine proportion of beneficial entitlement)—
	(a) in subsection (2), for the definition of “arrangements” substitute—
	““arrangements”—
	(a) means arrangements of any kind (whether or not in writing), but(b) does not include a condition or requirement imposed by, or agreed with, a Minister of the Crown, the Scottish Ministers, a Northern Ireland department or a statutory body,”, and
	(b) after that subsection insert—
	“(3) In subsection (2) “statutory body” means a body (other than a company as defined by section 1(1) of the Companies Act 2006) established by or under a statutory provision for the purpose of carrying out functions conferred on it by or under a statutory provision, except that the Treasury may, by order, specify that a body is or is not to be a statutory body for this purpose.”
	(3) In section 188 (other definitions for Part 5), in subsection (1), in the definition of “company” for “section 156(2A)” substitute “sections 156(2A) and 169(3)”.
	(4) The amendments made by this section have effect in relation to accounting periods ending on or after 1 January 2015.”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Clause 3
	 — 
	General Block Exemption Regulation

Schedule (General Block Exemption Regulation) makes provision in relation to Commission Regulation (EU) No 651/2014 (General block exemption Regulation).”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Clause 4
	 — 
	Co-operative societies etc

Schedule (Taxation of co-operative societies etc) makes provision about the tax treatment of co-operative, community benefit and industrial and provident societies and credit unions.”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Clause 5
	 — 
	Tax relief for theatrical production

Schedule (Tax relief for theatrical production) contains provision about relief in respect of theatrical productions.”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Clause 6
	 — 
	Exclusion of incentivised electricity or heat generation activities

‘(1) ITA 2007 is amended as follows.
	(2) In section 192 (EIS: meaning of “excluded activities”)—
	(a) in subsection (1), omit the “and” at the end of paragraph (ka) and after that paragraph insert—
	“(kb) the subsidised generation of heat or subsidised production of gas or fuel, and”, and
	(b) in subsection (2), omit the “and” at the end of paragraph (f) and after paragraph (g) insert “, and
	(h) section 198B (subsidised generation of heat and subsidised production of gas or fuel).”
	(3) In section 198A (excluded activities: subsidised generation or export of electricity)—
	(a) for subsection (3) substitute—
	“(3) The generation of electricity is “subsidised” if—
	(a) a person receives a FIT subsidy in respect of the electricity generated,
	(b) a renewables obligation certificate is issued in connection with the generation of the electricity, or
	(c) a scheme established in a territory outside the United Kingdom, and corresponding to that set out in a renewables obligation order under section 32 of the Electricity Act 1989, operates to incentivise the generation of the electricity.”,
	(b) in subsection (6), omit the “or” after paragraph (c) and after paragraph (d) insert “, or
	(e) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.”, and
	(c) in subsection (9), at the end insert—
	““renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.”
	(4) After that section insert—
	“198B Excluded activities: subsidised generation of heat and subsidised production of gas or fuel
	(1) This section supplements section 192(1)(kb).
	(2) The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—
	(a) a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or
	(b) a similar scheme established in a territory outside the United Kingdom,
	in respect of the heat generated, or gas or fuel produced.
	(3) But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 192(1)(kb) if Condition A or B is met.
	(4) Condition A is that the generation or production is carried on by—
	(a) a community interest company,
	(b) a co-operative society,
	(c) a community benefit society,
	(d) a NI industrial and provident society, or
	(e) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.
	(5) Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.
	(6) Section 198A(9) (definitions) applies for the purposes of this section as for the purposes of section 198A.”
	(5) In section 303 (VCTs: meaning of “excluded activities”)—
	(a) in subsection (1), omit the “and” at the end of paragraph (ka) and after that paragraph insert—
	“(kb) the subsidised generation of heat or subsidised production of gas or fuel, and”, and
	(b) in subsection (2), omit the “and” at the end of paragraph (f) and after paragraph (g) insert “, and
	(h) section 309B (subsidised generation of heat and subsidised production of gas and fuel).”
	(6) In section 309A (excluded activities: subsidised generation or export of electricity)—
	(a) for subsection (3) substitute—
	“(3) The generation of electricity is “subsidised” if—
	(a) a person receives a FIT subsidy in respect of the electricity generated,
	(b) a renewables obligation certificate is issued in connection with the generation of the electricity, or
	(c) a scheme established in a territory outside the United Kingdom, and corresponding to that set out in a renewables obligation order under section 32 of the Electricity Act 1989, operates to incentivise the generation of the electricity.”,
	(b) in subsection (6), omit the “or” after paragraph (c) and after paragraph (d) insert “, or
	(e) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.”, and
	(c) in subsection (9), at the end insert—
	““renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.”
	(7) After that section insert—
	“309B Excluded activities: subsidised generation of heat and subsidised production of gas or fuel
	(1) This section supplements section 303(1)(kb).
	(2) The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—
	(a) a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or
	(b) a similar scheme established in a territory outside the United Kingdom,
	in respect of the heat generated or gas or fuel produced.
	(3) But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 303(1)(kb) if Condition A or B is met.
	(4) Condition A is that the generation or production is carried on by—
	(a) a community interest company,
	(b) a co-operative society,
	(c) a community benefit society,
	(d) a NI industrial and provident society, or
	(e) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.
	(5) Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.
	(6) Section 309A(9) (definitions) applies for the purposes of this section as for the purposes of section 309A.”
	(8) The amendments made by subsections (2) to (4) have effect in relation to shares issued on or after the day on which this Act is passed.
	(9) The amendments made by subsections (5) to (7) have effect in relation to a relevant holding issued on or after the day on which this Act is passed.”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Schedule 1
	 — 
	“Oil contractors: ring-fence trade etc

CTA 2010
	1 CTA 2010 is amended as follows.2 In section 1 (overview of Act), in subsection (3), after paragraph (a) insert—
	“(aa) oil contractor activities (see Part 8ZA),
	(ab) profits arising from the exploitation of patents etc (see Part 8A),”.
	3 In Chapter 4 of Part 8 (oil activities: calculation of profits), after section 285 insert—
	“Hire of relevant assets
	285A Restriction on hire etc of relevant assets to be brought into account
	‘(1) This section applies if—
	(a) oil contractor activities are, or are to be, carried out, and
	(b) a company that carries on a ring fence trade makes, or is to make, one or more payments under a lease of a relevant asset, or part of a relevant asset, which is, or is to be, provided, operated or used in the relevant offshore service in question.
	(2) The total amount that may be brought into account in respect of the payments for the purposes of calculating the company’s ring fence profits in an accounting period is limited to the hire cap.
	(3) The “hire cap” is an amount equal to the relevant percentage of TC for the accounting period, subject to subsection (4).
	(4) If payments in relation to which subsection (2) or section 356N(2) (restriction on hire for oil contractors under Part 8ZA) applies are also made, or to be made, by one or more other companies in respect of the relevant asset or part, the “hire cap” is to be such proportion of the amount mentioned in
	subsection (3) as is just and reasonable, having regard (in particular) to the amounts of the payments made, or to be made, by each company.
	(5) The “relevant percentage” and TC are to be determined in accordance with section 356N(5) to (16).
	(6) To the extent that, by virtue of this section, payments within subsection (1)(b) cannot be brought into account for the purposes of calculating the company’s ring fence profits in an accounting period, the payments may be—
	(a) allowed as a deduction from the company’s total profits for the accounting period, or
	(b) treated as a surrenderable amount of the company for the accounting period for the purposes of Part 5 (group relief) (see section 99(7)) as if they were a trading loss,
	but this is subject to subsection (7).
	(7) No deduction may be made by virtue of subsection (6) from total profits so far as they are ring fence profits or contractor’s ring fence profits.
	(8) If the company or an associated person enters into arrangements the main purpose or one of the main purposes of which is to secure that subsection (2) does not apply in relation to one or more payments to any extent, that subsection applies in relation to the payments to the extent that it would not otherwise do so.
	(9) In subsection (8) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
	(10) In this section—
	“associated person” has the meaning given by section 356LB;
	“contractor’s ring fence profits” has the meaning given by section 356LD;
	“oil contractor activities” and “relevant offshore service” have the meaning given by section 356L;
	“relevant asset” has the meaning given by section 356LA;
	“lease” has the meaning given by section 868.”
	4 After Part 8 (oil activities) insert—

“Part 8ZA
	 — 
	Oil contractors
	 — 
	Chapter 1
	 — 
	Introduction

365K Overview of Part
	(1) This Part is about the corporation tax treatment of oil contractor activities.
	(2) Chapter 2 contains basic definitions used in this Part.
	(3) Chapter 3 treats oil contractor activities as a separate trade.
	(4) Chapter 4 makes provision about the calculation of profits from oil contractor activities.
	(5) For the meaning of oil contractor activities, see section 356L.

Chapter 2
	 — 
	Basic definitions

356L “Oil contractor activities” etc
	(1) The definitions in this section have effect for the purposes of this Part.
	(2) “Oil contractor activities” means activities carried on by a company (“the contractor”), which are not oil-related activities (within the meaning of section 274), but are—
	(a) exploration or exploitation activities in, or in connection with, which the contractor provides, operates or uses a relevant asset (see section 356LA) in a relevant offshore service, or
	(b) otherwise carried on in, or in connection with, the provision by the contractor of a relevant offshore service.
	(3) The contractor provides a “relevant offshore service” if the contractor provides, operates or uses a relevant asset in, or in connection with, the carrying on of exploration or exploitation activities in a relevant offshore area by the contractor or any other associated person.
	(4) “Exploration or exploitation activities” means activities carried on in connection with the exploration or exploitation of the seabed and subsoil and their natural resources.
	(5) “Relevant offshore area” means—
	(a) the territorial sea of the United Kingdom;
	(b) the areas designated by Order in Council under section 1(7) of the Continental Shelf Act 1964.
	356LA “Relevant asset”
	(1) In this Part “relevant asset” means an asset within subsection (2) in respect of which conditions A and B are met.
	(2) An asset is within this subsection if it is a structure that—
	(a) can be moved from place to place (whether or not under its own power) without major dismantling or modification, and
	(b) can be used to—
	(i) drill for the purposes of searching for, or extracting, oil, or
	(ii) provide accommodation for individuals who work on or from another structure used in a relevant offshore area for, or in connection with, exploration or exploitation activities (“offshore workers”).
	(3) But an asset is not within subsection (2)(b)(ii) if it is reasonable to suppose that its use to provide accommodation for offshore workers is unlikely to be more than incidental to another use, or other uses, to which the asset is likely to be put.
	(4) In subsection (2)—
	“oil” means any substance capable of being won under the authority of a licence granted under Part 1 of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964;
	“structure” includes a ship or other vessel.
	(5) Condition A is that the asset, or any part of the asset, is leased (whether by the contractor or not) from an associated person other than the contractor.
	(6) Condition B is that the asset is of the requisite value.
	(7) The asset is of the “requisite value” if its market value is £2,000,000 or more.
	(8) The Treasury may by regulations modify the meaning of “requisite value”.
	(9) Regulations under subsection (8) may—
	(a) amend this section,
	(b) make different provision for different cases or different purposes, and
	(c) make incidental, consequential, supplementary or transitional provision or savings.
	356LB “Associated person”
	(1) For the purposes of this Part each of the following is an “associated person”—
	(a) the contractor,
	(b) any person who is, or has been, connected with the contractor,
	(c) any person who has acted, acts or is to act, together with the contractor to provide a service, and
	(d) any person who is connected with a person falling within paragraph (b) or (c).
	(2) A person does not act together with the contractor to provide a service by reason only of leasing an asset, to any person, which is provided, operated or used in the service.
	356LC “Lease”
	In this Part “lease” has the meaning given by section 868 and “leased” and “leasing” are to be construed accordingly.
	356LD “Contractor’s ring fence profits”
	In this Part the “contractor’s ring fence profits”, in relation to an accounting period, means the contractor’s income arising from oil contractor activities for that period.

Chapter 3
	 — 
	Deemed separate trade

356M Oil contractor activities treated as separate trade
	If the contractor carries on oil contractor activities as part of a trade, those activities are treated for the purposes of the charge to corporation tax on income as a separate trade, distinct from all other activities carried on by the contractor as part of the trade.

Chapter 4
	 — 
	Calculation of profits

Hire of relevant assets 
	356N Restriction on hire etc of relevant assets to be brought into account
	(1) This section applies if the contractor makes, or is to make, one or more payments under a lease of—
	(a) a relevant asset, or
	(b) part of a relevant asset.
	(2) The total amount that may be brought into account in respect of the payments for the purposes of calculating the contractor’s ring fence profits in an accounting period is limited to the hire cap.
	(3) The “hire cap” is an amount equal to the relevant percentage of TC for the accounting period, subject to subsection (4).
	(4) If payments in relation to which subsection (2) or section 285A(2) (restriction on hire for company carrying on a ring fence trade under Part 8) applies are also made, or to be made, by one or more other companies in respect of the relevant asset or part, the “hire cap” is to be such proportion of the amount mentioned in subsection (3) as is just and reasonable, having regard (in particular) to the amounts of the payments made, or to be made, by the contractor and each other company.
	(5) Subject to subsection (7), the “relevant percentage” is—
	(UROS/TU) x 7.5%
	where—
	UROS is the number of days in the accounting period that the relevant asset is provided, operated or used in a relevant offshore service, and
	TU is the number of days in the accounting period that the relevant asset is provided, operated or used (whether or not in a relevant offshore service).
	(6) Accordingly, the relevant percentage is zero if the relevant asset is not provided, operated or used in the accounting period.
	(7) If the accounting period is less than 12 months, the relevant percentage is to be proportionally reduced.
	(8) TC is—
	OC + CE
	(9) Unless subsection (11) applies, OC is the sum of—
	(a) any consideration given for the acquisition of the relevant asset or part when it was first acquired by an associated person, and
	(b) any expenses incurred by an associated person in connection with that acquisition (other than the costs of financing the acquisition).
	This is subject to subsections (12) and (13).
	(10) Subsection (11) applies if the relevant asset or part—
	(a) is leased by an associated person from a person who is not an associated person, and
	(b) has never been owned by an associated person.
	(11) OC is the sum of—
	(a) the consideration that it is reasonable to suppose would have been given for the acquisition of the relevant asset or part, if it had been acquired by an associated person by way of a bargain at arm’s length at the time it was first leased as mentioned in subsection (10)(a), and
	(b) the expenses (other than the costs of financing the acquisition) that it is reasonable to suppose would have been incurred by an associated person in connection with such an acquisition.
	This is subject to subsections (12) and (13).
	(12) If the relevant asset or part was first acquired by an associated person, or (as the case may be) first leased as mentioned in subsection (10)(a), before the beginning of the accounting period, OC does not include any part of the consideration mentioned in subsection (9)(a) or (as the case may be) (11)(a) that it is reasonable to attribute to anything that no longer forms part of the relevant asset or part at the beginning of the accounting period.
	(13) If the relevant asset or part was first acquired by an associated person, or (as the case may be) first leased as mentioned in subsection (10)(a), in the accounting period, OC for the accounting period is—
	OC x (D - DBA/D)
	where—
	D is the total number of days in the accounting period,
	DBA is the number of days in the accounting period before the day on which the relevant asset or part was first acquired or first leased, and
	OC is the amount given by subsection (9) or (as the case may be) (11).
	(14) CE is capital expenditure on the relevant asset or part (other than capital expenditure in respect of its acquisition or the acquisition of a lease of it) incurred by an associated person—
	(a) after it was first acquired by an associated person or (as the case may be) was first leased as mentioned in subsection (10)(a), and
	(b) before the end of the accounting period.
	This is subject to subsections (15) and (16).
	(15) CE does not include any capital expenditure mentioned in subsection (14) that is—
	(a) incurred before the beginning of the accounting period, and
	(b) not reflected in the state or nature of the relevant asset or part at the beginning of the accounting period.
	(16) If any capital expenditure mentioned in subsection (14) is incurred on a day in the accounting period, the amount of CE for the accounting period in respect of that capital expenditure is—
	CEA x (D - DBI/D)
	where—
	D is the total number of days in the accounting period,
	DBI is the number of days in the accounting period before the day on which that capital expenditure is incurred, and
	CEA is the amount of that capital expenditure.
	356NA Restriction on hire: further provision
	(1) The Treasury may by regulations modify the “relevant percentage” for the purposes of section 356N or 285A.
	(2) Regulations under subsection (1) may—
	(a) amend section 356N or section 285A,
	(b) make different provision for different cases or different purposes, and
	(c) make incidental, consequential, supplementary or transitional provision or savings.
	(3) To the extent that, by virtue of section 356N, payments within subsection (1) of that section cannot be brought into account for the purposes of calculating the contractor’s ring fence profits in an accounting period, the payments may be—
	(a) allowed as a deduction from the contractor’s total profits for the accounting period, or
	(b) treated as a surrenderable amount of the contractor for the accounting period for the purposes of Part 5 (group relief) (see section 99(7)) as if they were a trading loss,
	subject to subsection (4).
	(4) No deduction may be made by virtue of subsection (3) from total profits so far as they are contractor’s ring fence profits or ring fence profits for the purposes of Part 8.
	(5) If an associated person enters into arrangements the main purpose or one of the main purposes of which is to secure that section 356N(2) does not apply in relation to one or more payments to any extent, that provision applies in relation to the payments to the extent it would not otherwise do so.
	(6) In subsection (5) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
	Loan relationships 
	356NB Restriction on debits to be brought into account
	(1) Debits may not be brought into account for the purposes of Part 5 of CTA 2009 (loan relationships) in respect of the contractor’s loan relationships in any way that results in a reduction of what would otherwise be the contractor’s ring fence profits, but this is subject to subsections (2) to (4).
	(2) Subsection (1) does not apply so far as a loan relationship is in respect of money borrowed by the contractor which has been—
	(a) used to meet expenditure incurred by the contractor in carrying on oil contractor activities, or
	(b) appropriated to meeting expenditure to be so incurred by the contractor.
	(3) Subsection (1) does not apply, in the case of debits falling to be brought into account as a result of section 329 of CTA 2009 (pre-loan relationship and abortive expenses) in respect of a loan relationship that has not been entered into, so far as the relationship would have been one entered into for the purpose of borrowing money to be used or appropriated as mentioned in subsection (2).
	(4) Subsection (1) does not apply, in the case of debits in respect of a loan relationship to which Chapter 2 of Part 6 of CTA 2009 (relevant non-lending relationships) applies, so far as—
	(a) the payment of interest under the relationship is expenditure incurred as mentioned in subsection (2)(a), or
	(b) the exchange loss arising from the relationship is in respect of a money debt on which the interest payable (if any) is, or would be, such expenditure.
	(5) If a debit—
	(a) falls to be brought into account for the purposes of Part 5 of CTA 2009 in respect of a loan relationship of the contractor, but
	(b) as a result of this section cannot be brought into account in a way that results in any reduction of what would otherwise be the contractor’s ring fence profits,
	the debit is to be brought into account for those purposes as a non-trading debit despite anything in section 297 of that Act.
	(6) References in this section to a loan relationship, in relation to the borrowing of money, do not include a relationship to which Chapter 2 of Part 6 of CTA 2009 (relevant non-lending relationships) applies.
	356NC Restriction on credits to be brought into account
	(1) Credits in respect of exchange gains from the contractor’s loan relationships may not be brought into account for the purposes of Part 5 of CTA 2009 (loan relationships) in any way that results in an increase of what would otherwise be the contractor’s ring fence profits, but this is subject to subsections (2) to (4).
	(2) Subsection (1) does not apply so far as a loan relationship is in respect of money borrowed by the contractor which has been—
	(a) used to meet expenditure incurred by the contractor in carrying on oil contractor activities, or
	(b) appropriated to meeting expenditure to be so incurred by the contractor.
	(3) Subsection (1) does not apply, in the case of credits falling to be brought into account as a result of section 329 of CTA 2009 (pre-loan relationship and abortive expenses) in respect of a loan relationship that has not been entered into, so far as the relationship would have been one entered into for the purpose of borrowing money to be used or appropriated as mentioned in subsection (2).
	(4) Subsection (1) does not apply, in the case of credits in respect of a loan relationship to which Chapter 2 of Part 6 of CTA 2009 (relevant non-lending relationships) applies, so far as—
	(a) the payment of interest under the relationship is expenditure incurred as mentioned in subsection (2)(a), or
	(b) the exchange gain arising from the relationship is in respect of a money debt on which the interest payable (if any) is, or would be, such expenditure.
	(5) If a credit—
	(a) falls to be brought into account for the purposes of Part 5 of CTA 2009 in respect of a loan relationship of the contractor, but
	(b) as a result of this section cannot be brought into account in a way that results in any increase of what would otherwise be the contractor’s ring fence profits,
	the credit is to be brought into account for those purposes as a non-trading credit despite anything in section 297 of that Act.
	(6) Section 356NB(6) applies for the purposes of this section.
	Relief 
	356ND Management expenses
	No deduction under section 1219 of CTA 2009 (expenses of management of a company’s investment business) is to be allowed from the contractor’s ring fence profits.
	356NE Losses
	Relief in respect of a loss incurred by the contractor may not be given under section 37 (relief for trade losses against total profits) against the contractor’s ring fence profits except so far as the loss arises from oil contractor activities.
	356NF Group relief
	(1) On a claim for group relief made by a claimant company in relation to a surrendering company, group relief may not be allowed against the claimant company’s contractor’s ring fence profits except so far as the claim relates to losses incurred by the surrendering company that arose from oil contractor activities.
	(2) In section 105 (restriction on surrender of losses etc within section 99(1)(d) to (g)) the references to the surrendering company’s gross profits of the surrender period do not include the company’s relevant contractor’s ring fence profits for that period.
	(3) The company’s “relevant contractor’s ring fence profits” for that period are—
	(a) if for that period there are no qualifying charitable donations made by the company that are allowable under Part 6 (charitable donations relief), the company’s contractor’s ring fence profits for that period, or
	(b) otherwise, so much of the contractor’s ring fence profits of the company for that period as exceeds the amount of the qualifying charitable donations made by the company that are allowable under section 189 for that period.
	(4) In this section “claimant company” and “surrendering company” are to be read in accordance with Part 5 (group relief) (see section 188).
	356NG Capital allowances
	A capital allowance may not to any extent be given effect under section 259 or 260 of CAA 2001 (special leasing) by deduction from the contractor’s ring fence profits.”
	5 In Schedule 4 (index of defined expressions), insert the following entries at the appropriate places—
	
		
			 “associated person (in Part 8ZA) section 356LB” 
			 “contractor (in Part 8ZA) section 356L(2)” 
			 “contractor’s ring fence profits (in Part 8ZA) section 356LD” 
			 “exploration or exploitation activities (in Part 8ZA) section 356L(4)” 
			 “lease (in Part 8ZA) section 356LC” 
			 “oil contractor activities (in Part 8ZA) section 356L(2)” 
			 “relevant asset (in Part 8ZA) section 356LA” 
			 “relevant offshore area (in Part 8ZA) section 356L(5)” 
			 “relevant offshore service (in Part 8ZA) section 356L(3)” 
		
	
	Commencement etc
	6 This Schedule is to be treated as having come into force on 1 April 2014 (“the commencement date”).7 Section 356L of CTA 2010 has effect in relation to activities carried out on or after the commencement date.
	8 (1) If, on the commencement date, a company was carrying on a trade that consisted of, or included, carrying out oil contractor activities, an accounting period ends (if it would not otherwise do so) with 31 March 2014.
	(2) Sub-paragraph (3) applies if—
	(a) but for sub-paragraph (1), a company would have had an accounting period that began before the commencement date and ended on or after that date (“the split accounting period”), and
	(b) the company’s accounting period beginning with 1 April 2014 ends when the split accounting period would have ended but for that sub-paragraph.
	(3) For the purposes of Chapter 4 of Part 22 of CTA 2010 (surrender of tax refund within group)—
	(a) the company is to be treated as having the split accounting period,
	(b) any tax refund due to the company for—
	(i) the accounting period ending with 31 March 2014, or
	(ii) the accounting period beginning with 1 April 2014,
	is to be treated as if it were a tax refund due to the company for the split accounting period, and
	(c) if the company surrenders a tax refund that is so treated (or part of such a refund), the references in section 964(6) of CTA 2010 to the date on which corporation tax became due and payable are to be treated as references to the date on which corporation tax would have become due and payable had the company had the split accounting period.
	9 (1) A company may be given relief under section 45 of CTA 2010 (carry forward of trade loss against subsequent trade profits) for a loss made in an accounting period ending before the commencement date against profits of a ring fence trade so far as (and only so far as) the loss would have been a loss of the ring fence trade had section 356L of that Act had effect in relation to activities carried out before the commencement date and Part 8ZA therefore applied.
	(2) In sub-paragraph (1) “ring fence trade” means oil contractor activities that constitute a separate trade (whether by virtue of section 356M of that Act or otherwise).”—(Mr Gauke.)
	Brought up, and added to the Bill.

New Schedule 2
	 — 
	“General Block Exemption Regulation

1 CAA 2001 is amended as follows.2 (1) Section 45DB (exclusions from allowances under section 45DA) is amended as follows.
	(2) In subsection (3)(a), for “a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” substitute “an undertaking in difficulty for the purposes of the General Block Exemption Regulation”.
	(3) In subsection (4)(a), for “Council Regulation (EC) No 104/2000” substitute “Regulation (EU) No 1379/2013 of the European Parliament and of the Council”.
	(4) In subsection (11), in the definition of “General Block Exemption Regulation”, for “(EC) No 800/2008” substitute “(EU) No 651/2014”.
	(5) In subsection (12), for paragraph (c) substitute—
	“(c) Regulation (EU) No 1379/2013 of the European Parliament and of the Council,”.
	3 In section 45K (expenditure on plant and machinery for use in designated assisted areas), after subsection (8) insert—
	“(8A) Condition C is met by virtue of subsection (8)(c) only if the amount of the expenditure exceeds the amount by which the relevant plant or machinery is depreciated in the period of 3 years ending immediately before the beginning of the chargeable period in which the expenditure is incurred.
	(8B) “Relevant plant or machinery” means the plant or machinery being used at the end of the period of 3 years mentioned in subsection (8A) for the purposes of the product, process or service mentioned in subsection (8)(c).”
	4 (1) Section 45M (exemptions from allowances under section 45K) is amended as follows.
	(2) In subsection (1), for “(6) or (7)” substitute “(7) or (7A)”.
	(3) In subsection (3)(a), for “a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” substitute “an undertaking in difficulty for the purposes of the General Block Exemption Regulation”.
	(4) In subsection (4)—
	(a) in paragraph (a), for “Council Regulation (EC) No 104/2000” substitute “Regulation (EU) No 1379/2013 of the European Parliament and of the Council”, and
	(b) after paragraph (b) insert—
	“(ba) in the transport sector or related infrastructure,
	(bb) relating to energy generation, distribution or infrastructure,
	(bc) relating to the development of broadband networks,”.
	(5) After that subsection insert—
	“(4A) Expressions used in subsection (4)(b), (ba), (bb) or (bc) and in the General Block Exemption Regulation have the same meaning as in that Regulation.”
	(6) Omit subsection (6).
	(7) After subsection (7) insert—
	“(7A) Expenditure is within this subsection if—
	(a) the area by reference to which the condition in section 45K(1)(a) is met is not an area which falls within Article 107(3)(a) of the Treaty on the Functioning of the European Union,
	(b) the condition in section 45K(8)(a) is not met in relation to the expenditure, and
	(c) at the time the expenditure is incurred the company is not an SME for the purposes of the General Block Exemption Regulation.”
	(8) In subsection (12)—
	(a) in the first definition, for the words from ““coal” to “have” substitute “has”, and
	(b) in the definition of “General Block Exemption Regulation”, for “(EC) No 800/2008” substitute “(EU) No 651/2014”.
	(9) In subsection (15), for paragraph (c) substitute—
	“(c) Regulation (EU) No 1379/2013 of the European Parliament and of the Council,”.
	5 (1) Section 45N (effect of plant or machinery subsequently being primarily for use outside designated assisted areas) is amended as follows.
	(2) In subsection (1)—
	(a) for “designated assisted area within the meaning of section 45K” substitute “relevant area”, and
	(b) for “such a designated assisted” substitute “a relevant”.
	(3) After subsection (3) insert—
	“(3A) “Relevant area” means—
	(a) in relation to expenditure which would be within subsection (7A) of section 45M if paragraph (a) of that subsection were omitted, a designated assisted area within the meaning of section 45K which falls within Article 107(3)(a) of the Treaty on the Functioning of the European Union, and
	(b) in relation to any other expenditure, a designated assisted area within the meaning of section 45K.”
	6 In section 212T(6) (cap on first-year allowances: zero-emission goods vehicles), in the definition of “undertaking”, for “(EC) No 800/2008” substitute “(EU) No 651/2014”.7 In section 212U(5) (cap on first-year allowances: expenditure on plant and machinery for use in designated assisted areas), in the definition of “single investment project”, for “(EC) No 800/2008” substitute “(EU) No 651/2014”.”8 The amendments made by this Schedule have effect in relation to expenditure incurred on or after the day on which this Act is passed.”—
	(Mr Gauke.)
	Brought up, and added to the Bill.

New Schedule 3
	 — 
	Taxation of co-operative societies etc

Taxation of Chargeable Gains Act 1992 (c. 12)
	1 In section 217D of TCGA 1992 (disposal of assets on union, amalgamation or transfer of engagements), in subsection (3), after paragraph (a) insert—
	“(aa) a society registered as a credit union under the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)),”.
	Co-operative and Community Benefit Societies Act 2014 (c. 14)
	2 Schedule 4 to the Co-operative and Community Benefit Societies Act 2014 (consequential amendments) is amended as follows.3 In paragraph 47 (which amends section 140E of TCGA 1992)—
	(a) in sub-paragraph (2), after “Co-operative and Community Benefit Societies Act 2014” insert “or a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”, and
	(b) in sub-paragraph (3), after “Co-operative and Community Benefit Societies Act 2014” insert “, a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”.
	4 In paragraph 48 (which amends section 140F of TCGA 1992) after “Co-operative and Community Benefit Societies Act 2014” insert “or a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”.5 In paragraph 49 (which amends section 140G of TCGA 1992) after “Co-operative and Community Benefit Societies Act 2014” insert “or a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”.6 In paragraph 50 (which amends section 170 of TCGA 1992)—
	(a) in sub-paragraph (2), for “within the meaning of the Co-operative and Community Benefits Societies Act 2014” substitute “(see section 1119 of that Act)”, and
	(b) in sub-paragraph (3), for “within the meaning of the Co-operative and Community Benefits Societies Act 2014” substitute “(see section 1119 of CTA 2010)”.
	7 In paragraph 53 (which amends Schedule 7AC of TCGA 1992) for “within the meaning of the Co-operative and Community Benefits Societies Act 2014” substitute “(see section 1119 of that Act)”.8 In paragraph 82 (which amends paragraph 28 of Schedule 2 to ITEPA 2003), in the sub-paragraph (5) substituted by sub-paragraph (3)—
	(a) omit the “or” following paragraph (b), and
	(b) at the end of paragraph (c) insert “, or
	(d) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.”.
	9 In paragraph 94 (which amends section 379 of ITTOIA 2005), in the definition of “registered society” inserted by sub-paragraph (4)—
	(a) omit the “or” following paragraph (a), and
	(b) after paragraph (b) insert—
	“(c) a society registered as a credit union under the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)), or
	“(d) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society,”.
	10 In paragraph 105 (which amends section 151 of ITA 2007), in the definition of “registered society” inserted by sub-paragraph (3)—
	(a) omit the “or” following paragraph (a), and
	(b) at the end of paragraph (b) insert “or
	(c) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society,”.
	11 In paragraph 110 (which amends section 887 of ITA 2007), in the subsection (5) substituted by sub-paragraph (5)—
	(a) omit the “or” following paragraph (a), and
	(b) after paragraph (b) insert—
	“(c) a society registered as a credit union under the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)), or
	“(d) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.”.
	12 In paragraph 158 (which amends section 90 of CTA 2010), in the definition of “registered society” inserted by sub-paragraph (3)—
	(a) omit the “or” following paragraph (a), and
	(b) at the end of paragraph (b) insert “or
	(c) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society,”.
	13 In paragraph 168 (which amends section 1119 of CTA 2010), in the definition of “registered society” inserted by sub-paragraph (3), for paragraph (c) and the “or” before it substitute—
	“(c) a society registered as a credit union under the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)), or
	(d) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society,”.
	14 In paragraph 171 (which amends section 118 of TIOPA 2010)—
	(a) in sub-paragraph (2), after “Co-operative and Community Benefit Societies Act 2014” insert “or a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”, and
	(b) in sub-paragraph (3), after “Co-operative and Community Benefit Societies Act 2014” insert “, a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969”.
	Commencement
	The amendments made by this Schedule come into force on 1 August 2014.”—
	(Mr Gauke.)
	Brought up, and added to the Bill.

New Schedule 4
	 — 
	Tax relief for theatrical production
	 — 
	Part 1
	 — 
	Amendments of CTA 2009

1 Before Part 16 of CTA 2009 insert—

Part 15C
	 — 
	theatrical productions

Introduction
	1217F Overview
	‘(1) This Part contains provision about tax relief for production companies in respect of their theatrical productions.
	(2) Sections 1217FA to 1217FC define “production company” and “theatrical production”.
	(3) Section 1217G sets out the conditions a production company must meet to qualify for relief in relation to its theatrical production.
	(4) Section 1217H provides for relief by way of additional deductions in respect of certain expenditure (and section 1217J is about the amount of the additional deduction).
	(5) This Part also contains provision—
	(a) for a company that claims relief to be treated as carrying on a separate trade relating to the theatrical production (see section 1217H(3)), and
	(b) about the calculation of the profits and losses of that trade (see sections 1217I to 1217IF).
	(6) Sections 1217K to 1217KC—
	(a) provide for relief by way of payments (called “theatre tax credits”) to be made on the company’s surrender of certain losses of that trade, and
	(b) set out an upper limit on relief, in connection with State aid legislation.
	(7) Sections 1217LA and 1217LB are about certain cases involving tax avoidance arrangements or arrangements entered into otherwise than for genuine commercial reasons.
	(8) Sections 1217M to 1217MC contain provision about the use of losses of the separate trade (including provision about relief for terminal losses).
	(9) Sections 1217N and 1217NA are concerned with the provisional nature of relief given for periods preceding the period in which the company ceases to carry on the separate theatrical trade.
	1217FA “Theatrical production”
	‘(1) In this Part “theatrical production” means a dramatic production or a ballet (and any ballet is therefore a theatrical production, whether or not it is also a dramatic production).
	But see section 1217FB.
	(2) “Dramatic production” means a production of a play, opera, musical, or other dramatic piece (whether or not involving improvisation) in relation to which the following conditions are met—
	(a) the actors, singers, dancers or other performers are to give their performances wholly or mainly through the playing of roles,
	(b) each performance in the proposed run of performances is to be live, and
	(c) the presentation of live performances is the main object, or one of the main objects, of the company’s activities in relation to the production.
	(3) “Dramatic piece” may also include, for example, a show that is to be performed by a circus.
	(4) For the purposes of this section a performance is “live” if it is to an audience before whom the performers are actually present.
	1217FB Productions not regarded as theatrical
	‘(1) A dramatic production or ballet is not regarded as a theatrical production if—
	(a) the main purpose, or one of the main purposes, for which it is made is to advertise or promote any goods or services,
	(b) the performances are to consist of or include a competition or contest,
	(c) a wild animal is to be used in any performance,
	(d) the production is of a sexual nature (see subsection (3)), or
	(e) the making of a relevant recording is the main object, or one of the main objects, of the company’s activities in relation to the production.
	(2) For the purposes of subsection (1)(c) an animal is used in a performance if the animal performs, or is shown, in the course of the performance.
	(3) A production is of a sexual nature for the purposes of subsection (1)(d) if the performances are to include any content the nature of which is such that, ignoring financial gain, it would be reasonable to assume the content to be included solely or principally for the purpose of sexually stimulating any member of the audience (whether by verbal or other means).
	(4) “Relevant recording” means a recording of a performance—
	(a) as a film (or part of a film) for exhibition to the paying general public at the commercial cinema, or
	(b) for broadcast to the general public.
	(5) In this section—
	“broadcast” means broadcast by any means (including television, radio or the internet);
	“film” has the same meaning as in Part 15 (see section 1181);
	“wild animal” means an animal of a kind which is not commonly domesticated in the British Islands (and in this definition “animal” has the meaning given by section 1(1) of the Animal Welfare Act 2006).
	1217FC “Production company”
	‘(1) A company is the production company in relation to a theatrical production if the company (acting otherwise than in partnership)—
	(a) is responsible for producing, running and closing the theatrical production,
	(b) is actively engaged in decision-making during the production, running and closing phases,
	(c) makes an effective creative, technical and artistic contribution to the production, and
	(d) directly negotiates for, contracts for and pays for rights, goods and services in relation to the production.
	(2) No more than one company can be the production company in relation to a theatrical production.
	(3) If more than one company meets the conditions in subsection (1) in relation to a theatrical production, the company that is most directly engaged in the activities mentioned in subsection (1) is the production company.
	(4) If there is no company meeting the conditions in subsection (1), there is no production company in relation to the production.
	Companies qualifying for relief 
	1217G How a company qualifies for relief
	‘(1) A company qualifies for relief in relation to a theatrical production if—
	(a) it is the production company in relation to the production, and
	(b) the commercial purpose condition (see section 1217GA) and the EEA expenditure condition (see section 1217GB) are met.
	(2) There is further provision relating to subsection (1) in section 1217LA (tax avoidance arrangements).
	1217GA The commercial purpose condition
	‘(1) The “commercial purpose condition” is that at the beginning of the production phase the company intends that all, or a high proportion of, the live performances that it proposes to run will be—
	(a) to paying members of the general public, or
	(b) provided for educational purposes.
	(2) The reference in subsection (1) to “live performances” is to be read in accordance with section 1217FA(4).
	(3) A performance is not regarded as provided for educational purposes if the production company is, or is associated with, a person who—
	(a) has responsibility for the beneficiaries, or
	(b) is otherwise connected with the beneficiaries (for instance, by being their employer).
	(4) For the purposes of subsection (3), a production company is associated with a person (“P”) if—
	(a) P controls the production company, or
	(b) P is a company which is controlled by the production company or by a person who also controls the production company.
	(5) In this section—
	“the beneficiaries” means persons for whose benefit the performance will or may be provided;
	“control” has the same meaning as in Part 10 of CTA 2010 (see section 450 of that Act).
	1217GB The EEA expenditure condition
	‘(1) The “EEA expenditure condition” is that at least 25% of the core expenditure on the theatrical production incurred by the company is EEA expenditure.
	(2) In this Part “EEA expenditure” means expenditure on goods or services that are provided from within the European Economic Area.
	(3) Any apportionment of expenditure as between EEA and non-EEA expenditure for the purposes of this Part is to be made on a just and reasonable basis.
	(4) The Treasury may by regulations—
	(a) amend the percentage specified in subsection (1);
	(b) amend subsection (2).
	(5) See also sections 1217N and 1217NA (which are about the giving of relief provisionally on the basis that the EEA expenditure condition will be met).
	1217GC “Core expenditure”
	‘(1) In this Part “core expenditure”, in relation to a theatrical production, means expenditure on the activities involved in—
	(a) producing the production, and
	(b) closing the production.
	(2) The reference in subsection (1)(a) to “expenditure on the activities involved in producing the production”—
	(a) does not include expenditure on any matters not directly involved in producing the production (for instance, financing, marketing, legal services or storage);
	(b) does not include expenditure on the ordinary running of the production; but expenditure incurred on or after the date of the first performance of the production to the paying general public may fall within subsection (1)(a) (for instance, if it is incurred in connection with a substantial recasting or a substantial redesign of the set).
	Claim for additional deduction 
	1217H Claim for additional deduction
	‘(1) A company which qualifies for relief in relation to a theatrical production may claim an additional deduction in relation to the production.
	(2) A claim under subsection (1) is made with respect to an accounting period.
	(See Schedule 18 to FA 1998, and in particular, Part 9D, for provision about the procedure for making claims.)
	(3) Where a company has made a claim under subsection (1)—
	(a) the company’s activities in relation to the theatrical production are treated for corporation tax purposes as a trade separate from any other activities of the company (including activities in relation to any other theatrical production), and
	(b) the company is entitled to make an additional deduction, in accordance with section 1217J, in calculating the profit or loss of the separate trade for the accounting period concerned.
	(4) The company is treated as beginning to carry on the separate trade—
	(a) when the production phase begins, or
	(b) if earlier, at the time of the first receipt by the company of any income from the theatrical production.
	(5) Where the company tax return in which a claim under subsection (1) is made is for an accounting period later than that in which the company begins to carry on the separate trade, the company must make any amendments of company tax returns for earlier periods that may be necessary.
	(6) Any amendment or assessment necessary to give effect to subsection (5) may be made despite any limitation on the time within which an amendment or assessment may normally be made.
	(7) If the company ceases at any time to meet the conditions in section 1217FC(1) (meaning of “production company”) in relation to the production, it is treated as ceasing to carry on the separate trade at that time.
	The separate theatrical trade 
	1217I Introduction to sections 1217IA to 1217IF
	‘(none) Where a company is treated under section 1217H(3)(a) as carrying on a separate trade (“the separate theatrical trade”), the profits or losses of the trade are calculated for corporation tax purposes in accordance with sections 1217IA to 1217IF.
	1217IA Calculation of profits or losses of separate theatrical trade
	‘(1) For the first period of account during which the separate theatrical trade is carried on, the following are brought into account—
	(a) as a debit, the costs of the theatrical production incurred (and represented in work done) to date;
	(b) as a credit, the proportion of the estimated total income from the production treated as earned at the end of that period.
	(2) For subsequent periods of account the following are brought into account—
	(a) as a debit, the difference between the amount (“C”) of the costs of the theatrical production incurred (and represented in work done) to date and the amount corresponding to C for the previous period, and
	(b) as a credit, the difference between the proportion (“PI”) of the estimated total income from the production treated as earned at the end of that period and the amount corresponding to PI for the previous period.
	(3) The proportion of the estimated total income treated as earned at the end of a period of account is—
	(C/T) x I
	where—
	C is the total to date of costs incurred (and represented in work done);
	T is the estimated total cost of the theatrical production;
	I is the estimated total income from the theatrical production.
	1217IB Income from the production
	‘(1) References in this Part to income from a theatrical production are to any receipts by the company in connection with the making or exploitation of the production.
	(2) This includes—
	(a) receipts from the sale of tickets or of rights in the theatrical production;
	(b) royalties or other payments for use of aspects of the theatrical production (for example, characters or music);
	(c) payments for rights to produce merchandise;
	(d) receipts by the company by way of a profit share agreement.
	(3) Receipts that (apart from this subsection) would be regarded as being of a capital nature are treated as being of a revenue nature.
	1217IC Costs of the production
	‘(1) References in this Part to the costs of a theatrical production are to expenditure incurred by the company on—
	(a) the activities involved in developing, producing, running and closing the production, or
	(b) activities with a view to exploiting the production.
	(2) This is subject to any provision of the Corporation Tax Acts prohibiting the making of a deduction, or restricting the extent to which a deduction is allowed, in calculating the profits of a trade.
	(3) Expenditure which, apart from this subsection, would be regarded as being of a capital nature only because it is incurred on the creation of an asset (i.e. the theatrical production) is treated as being of a revenue nature.
	1217ID When costs are taken to be incurred
	‘(1) For the purposes of this Part, the costs that have been incurred on a theatrical production at a given time—
	(a) are those costs of the production that are represented in the state of completion of the work in progress, but
	(b) do not include any amount that has not been paid unless it is the subject of an unconditional obligation to pay.
	(2) In accordance with subsection (1)(a)—
	(a) payments in advance of work to be done are ignored until the work has been carried out;
	(b) deferred payments are recognised to the extent that the goods or services in question are represented in the state of completion of the work in progress (but this is subject to subsection (1)(b)).
	(3) Where an obligation to pay an account is linked to income being earned from the theatrical production, the obligation is not treated as having become unconditional unless an appropriate amount of income is or has been brought into account under section 1217IA.
	(4) In determining for the purposes of this Part the amount of costs incurred on a theatrical production at the end of a period of account, any amount that has not been paid 4 months after the end of that period is to be ignored.
	1217IE Pre-trading expenditure
	‘(1) This section applies if, before the company begins to carry on the separate theatrical trade, it incurs expenditure on activities falling within section 1217IC(1)(a).
	(2) The expenditure may be treated as expenditure of the separate theatrical trade and as if incurred immediately after the company begins to carry on that trade.
	(3) If expenditure so treated has previously been taken into account for other tax purposes, the company must amend any relevant company tax return accordingly.
	(4) Any amendment or assessment necessary to give effect to subsection (3) may be made despite any limitation on the time within which an amendment or assessment may normally be made.
	1217IF Estimates
	Estimates for the purposes of section 12171A must be made as at the balance sheet date for each period of account, on a just and reasonable basis taking into consideration all relevant circumstances.
	Amount of additional deduction 
	1217J Amount of additional deduction
	‘(1) The amount of an additional deduction to which a company is entitled as a result of a claim under section 1217H is calculated as follows.
	(2) For the first period of account during which the separate theatrical trade is carried on, the amount of the additional deduction is E, where—
	E is—
	(a) so much of the qualifying expenditure incurred to date as is EEA expenditure, or(b) if less, 80% of the total amount of qualifying expenditure incurred to date.
	(3) For any period of account after the first, the amount of the additional deduction is—
	E – P
	where—
	E is—
	(a) so much of the qualifying expenditure incurred to date as is EEA expenditure, or(b) if less, 80% of the total amount of qualifying expenditure incurred to date, and
	P is the total amount of the additional deductions given for previous periods.
	(4) The Treasury may by regulations amend the percentage specified in subsection (2) or (3).
	1217JA “Qualifying expenditure”
	‘(1) In this Part “qualifying expenditure”, in relation to a theatrical production, means core expenditure (see section 1217GC) on the theatrical production that—
	(a) falls to be taken into account under sections 1217IA to 1217IF in calculating the profit or loss of the separate theatrical trade for tax purposes, and
	(b) is not excluded by subsection (2).
	(2) The following expenditure is excluded—
	(a) expenditure in respect of which the company is entitled to an R&D expenditure credit under Chapter 6A of Part 3;
	(b) expenditure in respect of which the company has obtained relief under Part 13 (additional relief for expenditure on research and development).
	Theatre tax credits 
	1217K Theatre tax credit claimable if company has surrenderable loss
	‘(1) A company which—
	(a) is treated under section 1217H(3) as carrying on a separate trade during the whole or part of an accounting period, and
	(b) has a surrenderable loss in that period,
	may claim a theatre tax credit for that accounting period.
	(2) Section 1217KA sets out how to calculate the amount of any surrenderable loss that the company has in the accounting period.
	(3) A company making a claim may surrender the whole or part of its surrenderable loss in the accounting period.
	(4) The amount of the theatre tax credit to which a company making a claim is entitled for the accounting period is—
	(a) 25% of the amount of the loss surrendered if the theatrical production is a touring production, or
	(b) 20% of the amount of the loss surrendered if the theatrical production is not a touring production.
	(5) The company’s available loss for the accounting period (see section 1217KA(2)) is reduced by the amount surrendered.
	(6) A theatrical production is a “touring production” only if the company intends at the beginning of the production phase—
	(a) that it will present performances of the production in 6 or more separate premises, or
	(b) that it will present performances of the production in at least two separate premises and that the number of performances will be at least 14.
	(7) See Schedule 18 to FA 1998 (in particular, Part 9D) for provision about the procedure for making claims under subsection (1).
	1217KA Amount of surrenderable loss
	‘(1) The company’s surrenderable loss in the accounting period is—
	(a) the company’s available loss for the period in the separate theatrical trade (see subsections (2) and (3)), or
	(b) if less, the available qualifying expenditure for the period (see subsections (4) and (5)).
	(2) The company’s available loss for an accounting period is—
	where—
	L is the amount of the company’s loss for the period in the separate theatrical trade, and
	RUL is the amount of any relevant unused loss of the company (see subsection (3)).
	(3) The “relevant unused loss” of a company is so much of any available loss of the company for the previous accounting period as has not been—
	(a) surrendered under section 1217K, or
	(b) carried forward under section 45 of CTA 2010 and set against profits of the separate theatrical trade.
	(4) For the first period of account during which the separate theatrical trade is carried on, the available qualifying expenditure is the amount that is E for that period for the purposes of section 1217J(2).
	(5) For any period of account after the first, the available qualifying expenditure is—
	E – S
	where—
	E is the amount that is E for that period for the purposes of section 1217J(3), and
	S is the total amount previously surrendered under section 1217K.
	(6) If a period of account of the separate theatrical trade does not coincide with an accounting period, any necessary apportionments are to be made by reference to the number of days in the periods concerned.
	1217KB Payment in respect of theatre tax credit
	‘(1) If a company—
	(a) is entitled to a theatre tax credit for an accounting period, and
	(b) makes a claim,
	the Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) must pay the amount of the credit to the company.
	(2) An amount payable in respect of—
	(a) a theatre tax credit, or
	(b) interest on a theatre tax credit under section 826 of ICTA,
	may be applied in discharging any liability of the company to pay corporation tax.
	To the extent that it is so applied the Commissioners’ liability under subsection (1) is discharged.
	(3) If the company’s company tax return for the accounting period is enquired into by the Commissioners, no payment in respect of a theatre tax credit for that period need be made before the Commissioners’ enquiries are completed (see paragraph 32 of Schedule 18 to FA 1998).
	In those circumstances the Commissioners may make a payment on a provisional basis of such amount as they consider appropriate.
	(4) No payment need be made in respect of a theatre tax credit for an accounting period before the company has paid to the Commissioners any amount that it is required to pay for payment periods ending in that accounting period—
	(a) under PAYE regulations,
	(b) under section 966 of ITA 2007 (visiting performers), or
	(c) in respect of Class 1 national insurance contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
	(5) A payment in respect of a theatre tax credit is not income of the company for any tax purpose.
	1217KC Limit on State aid
	‘(1) The total amount of any theatre tax credits payable under section 1217KB in the case of any undertaking is not to exceed 50 million euros per year.
	(2) In this section “undertaking” has the same meaning as in the General Block Exemption Regulation.
	(3) In this section “the General Block Exemption Regulation” means any regulation that—
	(a) is for the time being in force under Article 1 of Council Regulation (EC) No 994/98, and
	(b) makes, in relation to aid in favour of culture and heritage conservation, the declaration provided for by that Article.
	Anti-avoidance etc 
	1217LA Tax avoidance arrangements
	‘(1) A company does not qualify for relief in relation to a theatrical production if there are any tax avoidance arrangements relating to the production.
	(2) Arrangements are “tax avoidance arrangements” if their main purpose, or one of their main purposes, is the obtaining of a tax advantage.
	(3) In this section—
	“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable;
	“tax advantage” has the meaning given by section 1139 of CTA 2010.
	1217LB Transactions not entered into for genuine commercial reasons
	‘(1) A transaction is to be ignored for the purpose of determining a relief mentioned in subsection (2) so far as the transaction is attributable to arrangements (other than tax avoidance arrangements) entered into otherwise than for genuine commercial reasons.
	(2) The reliefs mentioned in subsection (1) are—
	(a) any additional deduction which a company may make under this Part, and
	(b) any theatre tax credit to be given to a company.
	(3) In this section “arrangements” and “tax avoidance arrangements” have the same meaning as in section 1217LA.
	Use of losses 
	1217M Application of sections 1217MA to 1217MC
	‘(1) Sections 1217MA to 1217MC apply to a company that is treated under section 1217H(3) as carrying on a separate trade in relation to a theatrical production.
	(2) In those sections—
	“the completion period” means the accounting period in which the company ceases to carry on the separate theatrical trade;
	“loss relief” includes any means by which a loss might be used to reduce the amount in respect of which a company, or any other person, is chargeable to tax.
	1217MA Restriction on use of losses before completion period
	‘(1) Subsection (2) applies if a loss is made by the company in the separate theatrical trade in an accounting period preceding the completion period.
	(2) The loss is not available for loss relief, except to the extent that the loss may be carried forward under section 45 of CTA 2010 to be set against profits of the separate theatrical trade in a subsequent period.
	1217MB Use of losses in the completion period
	‘(1) Subsection (2) applies if a loss made in the separate theatrical trade is carried forward under section 45 of CTA 2010 to the completion period.
	(2) So much (if any) of the loss as is not attributable to relief under section 1217H (see subsection (4)) may be treated for the purposes of loss relief as if it were a loss made in the completion period.
	(3) If a loss is made in the separate theatrical trade in the completion period, the amount of the loss that may be—
	(a) deducted from total profits of the same or an earlier period under section 37 of CTA 2010, or
	(b) surrendered as group relief under Part 5 of that Act,
	is restricted to the amount (if any) that is not attributable to relief under section 1217H.
	(4) The amount of a loss in any period that is attributable to relief under section 1217H is found by—
	(a) calculating what the amount of the loss would have been if there had been no additional deduction under that section in that or any earlier period, and
	(b) deducting that amount from the total amount of the loss.
	(5) This section does not apply to loss surrendered, or treated as carried forward, under section 1217MC (terminal losses).
	1217MC Terminal losses
	‘(1) This section applies if—
	(a) the company ceases to carry on the separate theatrical trade, and
	(b) if the company had not ceased to carry on the separate theatrical trade, it could have carried forward an amount under section 45 of CTA 2010 to be set against profits of that trade in a later period (“the terminal loss”).
	Below in this section the company is referred to as “company A” and the separate theatrical trade is referred to as “trade 1”.
	(2) If company A—
	(a) is treated under section 1217H(3) as carrying on a separate theatrical trade in relation to another theatrical production (“trade 2”), and
	(b) is carrying on trade 2 when it ceases to carry on trade 1,
	company A may (on making a claim) elect to transfer the terminal loss (or a part of it) to trade 2.
	(3) If company A makes an election under subsection (2), the terminal loss (or part of the loss) is treated as if it were a loss brought forward under section 45 of CTA 2010 to be set against the profits of trade 2 of the first accounting period beginning after the cessation and so on.
	(4) Subsection (5) applies if—
	(a) another company (“company B”) is treated under section 1217H(3) as carrying on a separate theatrical trade (“company B’s trade”) in relation to another theatrical production,
	(b) company B is carrying on that trade when company A ceases to carry on trade 1, and
	(c) company B is in the same group as company A for the purposes of Part 5 of CTA 2010 (group relief).
	(5) Company A may surrender the loss (or part of it) to company B.
	(6) On the making of a claim by company B the amount surrendered is treated as if it were a loss brought forward by company B under section 45 of CTA 2010 to be set against the profits of company B’s trade of the first accounting period beginning after the cessation and so on.
	(7) The Treasury may by regulations make administrative provision in relation to the surrender of a loss under subsection (5) and the resulting claim under subsection (6).
	(8) “Administrative provision” means provision corresponding, subject to such adaptations or other modifications as appear to the Treasury to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).
	Provisional entitlement to relief 
	1217N Provisional entitlement to relief
	‘(1) In relation to a company that has made a claim under section 1217H in relation to a theatrical production, “interim accounting period” means any accounting period that—
	(a) is one in which the company carries on the separate theatrical trade, and
	(b) precedes the accounting period in which it ceases to do so.
	(2) A company is not entitled to relief under any of the relieving provisions for an interim accounting period unless—
	(a) its company tax return for the period states the amount of planned core expenditure on the theatrical production that is EEA expenditure, and
	(b) that amount is such as to indicate that the EEA expenditure condition (see section 1217GB) will be met in relation to the production.
	If those requirements are met, the company is provisionally treated in relation to that period as if the EEA expenditure condition were met.
	(3) In this section “the relieving provisions” means—
	(a) section 1217H (additional deduction),
	(b) section 1217K (theatre tax credits), and
	(c) section 1217MC (terminal losses).
	1217NA Clawback of provisional relief
	‘(1) If a statement is made under section 1217N(2) but it subsequently appears that the EEA expenditure condition will not be met on the company’s ceasing to carry on the separate theatrical trade, the company—
	(a) is not entitled to relief under any of the relieving provisions for any period for which its entitlement depended on such a statement, and
	(b) must amend its company tax return for any such period accordingly.
	(2) When a company which has made a claim under section 1217H ceases to carry on the separate theatrical trade, the company’s company tax return for the period in which that cessation occurs must—
	(a) state that the company has ceased to carry on the separate theatrical trade, and
	(b) be accompanied by a final statement of the amount of the core expenditure on the theatrical production that is EEA expenditure.
	(3) If that statement shows that the EEA expenditure condition is not met—
	(a) the company is not entitled to relief under any of the relieving provisions for any period,
	(b) the company is treated for corporation tax purposes as if section 1217H(3)(a) (treatment as a separate trade) did not apply in relation to the theatrical production for any period, and
	(c) accordingly, sections 1217MA and 1217MB (provisions about use of losses) do not apply in relation to the theatrical production for any period.
	(4) Where subsection (3) applies, the company must amend its company tax return for any period in which (or in any part of which) it was treated as carrying on a separate trade relating to the theatrical production.
	(5) Any amendment or assessment necessary to give effect to this section may be made despite any limitation on the time within which an amendment or assessment may normally be made.
	(6) In this section “the relieving provisions” has the same meaning as in section 1217N.
	Interpretation 
	1217O Activities involved in developing, producing, running or closing a production
	‘(none) The Treasury may by regulations amend section 1217GC (core expenditure) or 1217IC (costs of production) for the purpose of providing that activities of a specified description are, or are not, to be regarded as activities involved in developing or (as the case may be) producing, running or closing—
	(a) a theatrical production, or
	(b) a theatrical production of a specified description.
	1217OA “Company tax return”
	‘(none) In this Part “company tax return” has the same meaning as in Schedule 18 to FA 1998 (see paragraph 3(1) of that Schedule).
	1217OB Index
	‘(none) In this Part—
	“commercial purpose condition” has the meaning given by section 1217GA;
	“company tax return” has the meaning given by section 1217OA;
	“core expenditure” has the meaning given by section 1217GC;
	“costs”, in relation to a theatrical production, has the meaning given by section 1217IC;
	“EEA expenditure” has the meaning given by section 1217GB;
	“EEA expenditure condition” has the meaning given by section 1217GB;
	references to “income from a theatrical production” are to be read in accordance with section 1217IB;
	“production company” has the meaning given by section 1217FC;
	“qualifying expenditure” has the meaning given by section 1217JA;
	references to the “separate theatrical trade” are to be read in accordance with section 1217I;
	“theatrical production” has the meaning given by section 1217FA (read with section 1217FB).”

Part 2
	 — 
	Consequential amendments

ICTA
	2 (1) Section 826 of ICTA (interest on tax overpaid) is amended as follows.
	(2) In subsection (1), after paragraph (fb) insert—
	“(fc) a payment of theatre tax credit falls to be made to a company; or”.
	(3) In subsection (3C), for “or video game tax credit” substitute “, video game tax credit or theatre tax credit”.
	(4) In subsection (8A)—
	(a) in paragraph (a) for “or (f)” substitute “(f), (fa), (fb) or (fc)”, and
	(b) in paragraph (b)(ii), after “video game tax credit” insert “or theatre tax credit”.
	(5) In subsection (8BA), after “video game tax credit” (in both places) insert “or theatre tax credit”.
	FA 1998
	3 Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.4 In paragraph 10 (other claims and elections to be included in return), in sub-paragraph (4)—
	(a) before “claims” insert “certain”;
	(b) for “or 15B” substitute “,15B or 15C”.
	5 (1) Paragraph 52 (recovery of excessive overpayments etc) is amended as follows.
	(2) In sub-paragraph (2), after paragraph (bf) insert—
	(bg) theatre tax credit under Part 15C of that Act,”.
	(3) In sub-paragraph (5)—
	(a) after paragraph (ah) insert—
	(ai) an amount of theatre tax credit paid to a company for an accounting period,”;
	(b) in the words after paragraph (b), after “(ah)” insert “, (ai)”.
	6 (1) Part 9D (certain claims for tax relief) is amended as follows.
	(2) In paragraph 83S (introduction), after paragraph (c) insert—
	(d) an additional deduction under Part 15C of CTA 2009,
	(b) a theatre tax credit under that Part of that Act.”
	(3) The heading of that Part becomes “”.
	CAA 2001
	7 In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit the “and” at the end of paragraph (d) and after paragraph (e) insert “,and
	(f) section 1217K of that Act (theatre tax credits).”
	FA 2007
	8 In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), omit the “or” at the end of sub-paragraph (ivb) and after that sub-paragraph insert—a theatre tax credit under section 1217K of that Act, or”.
	(ivc) a theatre tax credit under section 1217K of that Act, or”.
	CTA 2009
	9 In section 104BA of CTA 2009 (R&D expenditure credits: restrictions on claiming other tax reliefs), after subsection (3) insert—
	“(4) For provision prohibiting an R&D expenditure credit being given under this Chapter and relief being given under section 1217H or 1217K (theatrical productions: additional deduction or theatre tax credit), see section 1217JA(2).”
	10 In Part 8 of CTA 2009 (intangible fixed assets), in Chapter 10 (excluded assets), before section 809 insert—
	“808C Assets representing expenditure incurred in course of separate theatrical trade
	(1) This Part does not apply to an intangible fixed asset held by a theatrical production company so far as the asset represents expenditure on a theatrical production that is treated under Part 15C as expenditure of a separate trade (see particularly sections 1217H and 1217IE).
	(2) In this section—
	“theatrical production” has the same meaning as in Part 15C (see section 1217FA);
	“theatrical production company” means a company which, for the purposes of that Part, is the production company in relation to a theatrical production (see section 1217FC).”
	11 In section 1040ZA of CTA 2009 (additional relief for expenditure on research and development), after subsection (3) insert—
	“(4) For provision prohibiting relief being given under this Part and under section 1217H or 1217K (theatrical productions: additional deduction or theatre tax credit), see section 1217JA(2).”
	12 In section 1310 of CTA 2009 (orders and regulations), in subsection (4), after paragraph (ej) insert—
	“(ek) section 1217GB(4) (EEA expenditure condition),
	(el) section 1217J(4) (amount of additional deduction),
	(em) section 1217O (activities involved in developing, producing, running or closing a production),”.
	13 In Schedule 4 to CTA 2009 (index of defined expressions) at the appropriate place insert—
	
		
			 “commercial purpose condition (in Part 15C) section 1217OB”; 
			 “company tax return (in Part 15C) section 1217OA”; 
			 “core expenditure (in Part 15C) section 1217GC”; 
			 “costs of a theatrical production (in Part 15C) section 1217IC”; 
			 “EEA expenditure (in Part 15C) section 1217GB”; 
			 “EEA expenditure condition (in Part 15C) section 1217OB”; 
			 “income from a theatrical production (in Part 15C) section 1217IC”; 
			 “production company (in Part 15C) section 1217FC”; 
			 “qualifying expenditure (in Part 15C) section 1217JA”; 
			 “the separate theatrical trade (in Part 15C) section 1217OB”; 
			 “theatrical production (in Part 15C) section 1217FA”. 
		
	
	FA 2009
	14 In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A 2010 and contains provision about the recovery of certain amounts of interest paid by HMRC), in paragraph 2—
	(a) in sub-paragraph (2), omit the “or” at the end of paragraph (f) and after paragraph (g) insert “,or
	(h) a payment of theatre tax credit under section 1217K of CTA 2009 for an accounting period.”;
	(b) in sub-paragraph (4), for “(e)” substitute “(h)”.
	CTA 2010
	15 (1) Section 357CG of CTA 2010 (profits arising from the exploitation of patents etc: adjustments in calculating profits of trade) is amended as follows.
	(2) In subsection (3), omit the “and” at the end of paragraph (c) and after paragraph (d) insert “,and
	(e) the amount of any additional deduction for the accounting period obtained by the company under Part 15C of CTA 2009 in respect of qualifying expenditure on a theatrical production.”
	(3) In subsection (6)—
	(a) in the definition of “qualifying expenditure”, omit the “and” at the end of paragraph (a) and after paragraph (b) insert “,and
	(i) in relation to a company that is the production company (as defined in section 1217FC of that Act) in relation to a theatrical production, has the same meaning as in Part 15C of that Act,”;
	(b) omit the “and” at the end of the definition of “television production company” and after that definition insert—
	““theatrical production” has the same meaning as in Part 15C of CTA 2009 (see section 1217FA of that Act), and”.

Part 3
	 — 
	Commencement

16 (1) Any power to make regulations conferred on the Treasury by virtue of this Schedule comes into force on the day on which this Act is passed.
	(2) So far as not already brought into force by sub-paragraph (1), the amendments made by this Schedule come into force in accordance with provision contained in an order made by the Treasury.
	(3) An order under sub-paragraph (2) may make different provision for different purposes.
	17 (1) The amendments made by this Schedule have effect in relation to accounting periods beginning on or after 1 September 2014.
	(2) Sub-paragraph (3) applies where a company has an accounting period beginning before 1 September 2014 and ending on or after that date (“the straddling period”).
	(3) For the purposes of Part 15C of CTA 2009—
	(a) so much of the straddling period as falls before 1 September 2014, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
	(b) any amounts brought into account for the purposes of calculating for corporation tax purposes the profits of a trade for the straddling period are apportioned to the two separate accounting periods on such basis as is just and reasonable.”—(Mr Gauke.)
	Brought up, and added to the Bill.

Clause 207
	 — 
	Appeal against a section 201 penalty

Amendments made: 1,page138,line23, at end insert—
	‘(2A) The grounds on which an appeal under subsection (1) may be made include in particular—
	(a) that Condition A, B or D in section197was not met in relation to the follower notice,
	(b) that the judicial ruling specified in the notice is not one which is relevant to the chosen arrangements,
	(c) that the notice was not given within the period specified in subsection (6) of that section, or
	(d) that it was reasonable in all the circumstances for P not to have taken the necessary corrective action (see section201(4)) in respect of the denied advantage.”
	Amendment 2,page138,line43, at end insert—
	‘(8A) The cancellation under subsection (7) of HMRC’s decision on the ground specified in subsection (2A)(d) does not affect the validity of the follower notice, or of any accelerated payment notice or partner payment notice under Chapter 3 related to the follower notice.”—(Mr Gauke.)

Schedule 27
	 — 
	Follower notices and partnerships

Amendment made: 3,page535,line45, at end insert—
	‘(7A) Section 207(2A) applies to an appeal by virtue of sub-paragraph (7)(a) as it applies to an appeal under section 207(1).”—(Mr Gauke.)

Clause 291
	 — 
	Removal of limitation period restriction for EU cases

Amendment made: 4,page199, leave out lines 23 to 29.—(Mr Gauke.)

Clause 73
	 — 
	Air passenger duty: adjustments to Part 3 of Schedule 5A to FA 1994

Amendments made: 5,page61,line18, leave out “as follows” and insert
	“in accordance with subsections (2) to (10)”.
	Amendment 6,page62,line9, at end insert—
	‘( ) Accordingly, in section 1 of the Air Passenger Duty (Setting of Rate) Act (Northern Ireland) 2012 (setting of rate of air passenger duty)—
	(a) in subsection (1)—
	(i) omit “(3)(a) and (b), (4)(a) and (b),”, and
	(ii) for “(5A)(a), (b) and (c)” substitute “(5A)(c)”, and
	(b) omit subsections (2) to (5), (8) and (9).”—(Mr Gauke.)

Schedule 7
	 — 
	Employment-related securities etc

Amendments made: 7,page311,line41, at end insert—
	“9A (1) Section 428 (restricted securities: amount of charge) is amended as follows.
	(2) In subsection (7), after paragraph (ba) insert—
	“(bb) any amount that was charged to non-UK income tax in respect of the acquisition of the employment-related securities, but only so far as that amount exceeds any amount within paragraph (b) or (ba),”.
	(3) After subsection (7) insert—
	(7A) In subsection (7)(b) and (ba) the references to an amount of exempt income, in a case in which the amount that constituted, or was treated as, earnings in respect of the acquisition was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applied, includes any amount that would have been an amount of exempt income if any of those charging provisions had applied.
	(7B) In subsection (7)(bb) “non-UK income tax” means a tax chargeable on income under the law of a territory outside the United Kingdom that corresponds to United Kingdom income tax.
	(7C) A tax is not outside the scope of subsection (7B) by reason only that it—
	(a) is chargeable under the law of a province, state or other part of a country, or
	(b) is levied by or on behalf of a municipality or other local body.””
	Amendment 8,page312,line8, at end insert—
	11A In section 446T (securities acquired for less than market value: amount of notional loan), after subsection (3) insert—
	(3A) In subsection (3)(b) and (ba) the references to an amount of exempt income, in a case in which the amount that constitutes, or is treated as, earnings in respect of the acquisition is not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies, includes any amount that would be an amount of exempt income if any of those charging provisions were to apply.”
	Amendment 9,page312,line10, at end insert—
	12A In section 480 (securities options: deductible amounts), after subsection (5) insert—
	(5A) In subsection (5)(a) the reference to an amount of exempt income, in a case in which the amount that constituted earnings in respect of the acquisition was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applied, includes any amount that would have been an amount of exempt income if any of those charging provisions had applied.”
	Amendment 10,page313,line26, at end insert—
	23A In section 149AA (restricted and convertible employment-related securities and employee shareholder shares), in subsection (7)—
	(a) after “include” insert “—
	(a) ”, and
	(b) at the end insert “, or
	(b) in a case in which the amount that constituted, or was treated as, earnings was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 of ITEPA 2003 applied, any amount that would have been an amount of such exempt income if any of those charging provisions had applied.””—(Mr Gauke.)

Schedule 6
	 — 
	Employee share schemes

Amendments made: 11,page273,line29, at end insert—
	139A (1) Section 94A of ITTOIA 2005 (costs of setting up SAYE option scheme or CSOP scheme) is amended as follows.
	(2) In subsection (1)—
	(a) in paragraph (a) omit “that is approved by an officer of Revenue and Customs”, and
	(b) omit paragraph (b) and the “and” before it.
	(3) In subsection (2)—
	(a) at the beginning of paragraph (a) insert “Schedule 3”,
	(b) at the beginning of paragraph (b) insert “Schedule 4”, and
	(c) omit the final sentence.
	(4) In subsection (4) for “approval is given” (in both places) substitute “relevant date falls”.
	(5) After subsection (4) insert—
	(4A) In subsection (4) “the relevant date”—
	(a) in relation to a Schedule 3 SAYE option scheme, has the meaning given in paragraph 40A(6) of Schedule 3 to ITEPA 2003, and
	(b) in relation to a Schedule 4 CSOP scheme, has the meaning given in paragraph 28A(6) of Schedule 4 to ITEPA 2003.””
	Amendment 12,page276,line42, after “under” insert
	“section 94A of ITTOIA 2005 or”.
	Amendment 13,page294,line48, leave out “paragraph 141” and insert “paragraphs 139A and 141”.
	Amendment 14,page295,line1, after “under” insert “section 94A of ITTOIA 2005 or”.—(Mr Gauke.)

Schedule 9
	 — 
	Tax relief for social investments

Amendments made: 15,page328,line20, after “charity,” insert—
	“() an accredited social impact contractor (see section 257JD),”
	Amendment 16,page330,line33, after “Part” insert “(except section 257JD)”.
	Amendment 17,page330,line34, at end insert—
	257JD
	“257JD Accreditation as a social impact contractor
	(1) In this Part “accredited social impact contractor” means a company limited by shares that is accredited under this section as a social impact contractor.
	(2) Applications for accreditation as a social impact contractor must be made to a Minister of the Crown in the form and manner specified by a Minister of the Crown.
	(3) A Minister of the Crown is to accredit a company if, but only if, that Minister is satisfied that—
	(a) the company has entered into a social impact contract (see section 257JE),
	(b) the company is, and at all times since its incorporation has been, established—
	(i) for the purpose of entering into and carrying out a social impact contract, or for that purpose and purposes incidental to it, but
	(ii) for no other purpose, and
	(c) the activities of the company in carrying out that contract will not consist wholly, or as to a substantial part, in excluded activities (see section 257MQ).
	(4) If a Minister of the Crown is satisfied that the condition in subsection (3)(b) or (c) has ceased to be met in relation to a company that is an accredited social impact contractor, that Minister is to withdraw the company’s accreditation with effect from the time the condition ceased to be met or a later time.
	257JE Meaning of “social impact contract”
	(1) In this Part “social impact contract” means a contract that meets such criteria as may be specified in regulations made by the Treasury.
	(2) The criteria which may be specified under subsection (1) include, in particular, criteria as to a party to the contract other than the company seeking accreditation.
	(3) Criteria may be specified in regulations under subsection (1) by reference to material published by, or on behalf of, a Minister of the Crown after the making of the regulations (as well as by reference to material published before the making of the regulations).
	(4) Regulations under subsection (1) may make different provision for different cases or circumstances or in relation to different areas.
	257JF Accreditations: supplementary provisions
	(1) An accreditation must be made so as to be conditional on compliance with—
	(a) any requirements imposed by or under regulations, and
	(b) any other requirements considered appropriate by the Minister of the Crown who is accrediting the company concerned.
	(2) The requirements that may be imposed by virtue of subsection (1) include requirements relating to the provision of information.
	(3) Regulations may—
	(a) make further provision about applications for accreditation,
	(b) make provision for the variation of an accreditation (including its provisions as to its duration),
	(c) make provision which, in a case where a company is or has been an accredited social impact contractor, imposes or authorises the imposition of requirements on the company, or on any other party to the social impact contract concerned, to provide information,
	(d) make provision about the consequences of a failure to comply with any requirement of an accreditation imposed by virtue of subsection (1) or with any requirement imposed by virtue of paragraph (c), including in particular—
	(i) provision for the withdrawal of the accreditation concerned with effect from the time of the failure or a later time, and
	(ii) provision for the imposition of penalties,
	(e) make provision for publication of information about an accreditation or accredited social impact contractor, and
	(f) make provision for reviews of, or for appeals to the tribunal against, any of the following—
	(i) a refusal to grant or vary an accreditation,
	(ii) the imposition of a requirement under subsection (1)(b),
	(iii) the withdrawal of an accreditation (whether under section 257JD(4) or by virtue of provision made under paragraph (d)(i)), and
	(iv) the imposition or amount of a penalty imposed by virtue of provision made under paragraph (d)(ii).
	(4) Regulations under subsection (1) or (3) may—
	(a) make provision for the making of decisions by a Minister of the Crown as to any matter required to be decided for the purposes of the regulations,
	(b) be framed by reference to material published by, or on behalf of, a Minister of the Crown after the making of the regulations (as well as by reference to material published before the making of the regulations),
	(c) make different provision for different cases or circumstances or in relation to different areas, and
	(d) contain incidental, supplemental, consequential and transitional provision and savings.
	(5) In this section—
	“accreditation” means accreditation under section 257JD, and
	“regulations” means regulations made by the Treasury.
	257JG Period of accreditation as a social impact contractor
	(1) An accreditation under section 257JD has effect for a period—
	(a) beginning with the day specified in the accreditation, and
	(b) of a length specified in, or determined in accordance with, the accreditation.
	(2) The day specified under subsection (1)(a) in an accreditation may not be earlier than 6 April 2014 but subject to that—
	(a) may be, or be earlier than, the day it is decided to grant the accreditation (and in particular may be, or be earlier than, the day the application for the accreditation is made), and
	(b) may be earlier than the day section 257JD comes into force.
	(3) This section has effect subject to sections 257JD(4) and 257JF(3)(d)(i) (withdrawal of accreditations).
	257JH Functions of Ministers of the Crown under sections 257JD to 257JG
	(1) A Minister of the Crown may delegate any function given to a Minister of the Crown by or under sections 257JD to 257JG other than a power of the Treasury to make regulations.
	(2) In those sections and this section “Minister of Crown” has the meaning given by section 8(1) of the Ministers of the Crown Act 1975.”
	Amendment 18,page331,line1, at end insert—
	( ) Subsection (1)(b) is subject to the provisions in sections 257LB and 257MJ to 257MN which provide for conditions set out in those sections not to apply where the social enterprise is an accredited social impact contractor.”
	Amendment 19,page334,line44, at end insert—
	( ) Subsections (2) to (4) do not apply if the social enterprise is an accredited social impact contractor.”
	Amendment 20,page335,line12, after “257MJ(2)(c)” insert
	“or is a parent company that is an accredited social impact contractor”.
	Amendment 21,page339,line23, at end insert—
	257M
	“257M The continuing to be a social enterprise requirement
	The social enterprise must be a social enterprise throughout the shorter applicable period.”
	Amendment 22,page343,line11, after “period” insert
	“, but this does not apply if the social enterprise is an accredited social impact contractor”.
	Amendment 23,page343,line15, after “business” insert “—
	(i) ”.
	Amendment 24,page343,line17, leave out “non-qualifying” and insert
	“non-trade activities, and
	(ii) does not consist wholly, or as to a substantial part, in the carrying-on of excluded”.
	Amendment 25,page344,line14, at end insert
	“, and
	“non-trade activities” means activities which are neither of the following—
	(a) activities carried on in the course of a trade, and(b) activities carried on in the course of preparing to carry on a trade.”
	Amendment 26,page345,line26, at end insert—
	( ) This section does not apply if the social enterprise is an accredited social impact contractor.”
	Amendment 27,page346,line19, at end insert—
	( ) If the social enterprise is an accredited social impact contractor, the preceding provisions of this section apply with the following modifications—
	(a) in subsection (1), for “28 months” substitute “24 months”,
	(b) in that subsection, for “the funded purpose” substitute “the carrying out of the social impact contract concerned”, and
	(c) omit subsections (2), (3), (5) and (6).”
	Amendment 28,page347,line7, at end insert—
	( ) This section does not apply if the social enterprise is an accredited social impact contractor.”
	Amendment 29,page347,line20, at end insert “257JD,”
	Amendment 30,page353,line10, at end insert—
	( ) If the social enterprise is an accredited social impact contractor, subsection (1) applies with the omission of its paragraph (a).”
	Amendment 31,page354,line8, at end insert—
	( ) If the social enterprise is an accredited social impact contractor, subsection (3) applies with the omission of its paragraph (a).”
	Amendment 32,page355,line8, at end insert—
	( ) An order under this section may make different provision for different cases or purposes.”
	Amendment 33,page372,line31, leave out “257MA” and insert “257M”.
	Amendment 34,page373,line24, after “sections” insert “257M,”.
	Amendment 35,page374,line13, at end insert—7
	(7) If the event mentioned in subsection (1) is one whose occurrence results in the requirement in section 257M not being met in respect of the investment, the references in subsections (2) and (3) to the social enterprise are to—
	(a) the body concerned even though it has ceased to be a social enterprise, or
	(b) the body into which the social enterprise has been converted.”
	Amendment 36,page376,line11, after “prevent” insert
	“—
	(a) ”.
	Amendment 37,page376,line12, at end insert—
	“(b) disclosure to a Minister of the Crown for the purposes of functions of a Minister of the Crown under sections 257JD to 257JG, or
	(c) disclosure to a person for the purposes of functions delegated to the person under section 257JH(1).”
	Amendment 38,page376,line18, after “Information” insert
	“originally disclosed in reliance on subsection (2)(a)”.
	Amendment 39,page376,line19, at end insert—
	(5) Information originally disclosed in reliance on subsection (2)(b) or (c) may be disclosed in reliance on subsection (3)(a) only for the purposes of—
	(a) functions of a Minister of the Crown under sections 257JD to 257JG, or
	(b) functions delegated to a person under section 257JH(1).
	(6) If, in contravention of subsections (3) to (5), any revenue and customs information relating to a person is disclosed and the identity of the person—
	(a) is specified in the disclosure, or
	(b) can be deduced from it,
	section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of wrongful disclosure) applies as it applies in relation to a disclosure of such information in contravention of section 20(9) of that Act.
	(7) In subsection (6) “revenue and customs information relating to a person” has the meaning given by section 19(2) of that Act.
	(8) Subject to subsections (3) and (5), no obligation as to confidentiality or other restriction on disclosure, whether imposed by an enactment or otherwise, prevents disclosure of relevant information—
	(a) to a Minister of the Crown for the purposes of functions of a Minister of the Crown under sections 257JD to 257JG,
	(b) to a person for the purposes of functions delegated to the person under section 257JH(1), or
	(c) to an officer of Revenue and Customs for the purpose of assisting Her Majesty’s Revenue and Customs to discharge their functions under the Income Tax Acts so far as relating to matters arising under this Part.
	(9) In subsection (8) “relevant information” means information obtained—
	(a) by a Minister of the Crown, or
	(b) by a person to whom functions have been delegated under section 257JH(1),
	in the course of discharging functions under sections 257JD to 257JG.
	(10) In this section “Minister of the Crown” has the meaning given by section 8(1) of the Ministers of the Crown Act 1975.”
	Amendment 40,page381,line20, leave out “by way of, or amounts” and insert
	“not by way of, and does not amount”.—(
	Mr Gauke.
	>)

Schedule 10
	 — 
	Investments in social enterprises: capital gains

Amendment made: 41,page387,line5, at end insert—
	(8) A reference in this paragraph to a social enterprise is a reference to a body that is a social enterprise for the purposes of Part 5B of ITA 2007 (see section 257J of that Act).”—(Mr Gauke.)

Clause 61
	 — 
	Business premises renovation allowances

Amendments made: 42,page52,line12, leave out “(EC) No 800/2008” and insert “(EU) No 651/2014”
	Amendment 43,page52,line41, at end insert—
	‘( ) In the application of section 360L of CAA 2001 in relation to expenditure incurred before the day on which this Act is passed, the definition of “General Block Exemption Regulation” in subsection (6) of that section is to be treated as referring to Commission Regulation (EC) No 800/2008.”—(Mr Gauke.)

Schedule 33
	 — 
	Companies owned by employee-ownership trusts

Amendments made: 44,page559,line35, leave out “(see sections 236J to 236L)” and insert
	“at the time of the disposal and continues to meet that requirement for the remainder of the tax year in which that time falls (see sections 236J to 236L and subsection (4A) of this section)”.
	Amendment 45,page560,line1, leave out “but does meet it at the end of that year” and insert
	“but—
	(i) it meets that requirement at the end of that tax year, and
	(ii) if it met the requirement at an earlier time in that tax year (whether before or after the time of the disposal) it continued to meet it throughout the remainder of that tax year,”
	Amendment 46,page560,line7, at end insert—
	‘(4A) For the purposes of subsection (4)(b)—
	(a) unless the settlement met the all-employee benefit requirement by virtue of section 236L (cases in which all-employee benefit requirement treated as met) at the time of the disposal, that section does not apply
	for the purposes of determining whether the settlement continues to meet that requirement after the disposal, and
	(b) if, at the time of the disposal, the settlement met that requirement by virtue of section 236L and later continues to meet it otherwise than by virtue of that section, it may not again meet the requirement by virtue of that section.”
	Amendment 47,page560,line19, at end insert—
	‘(7) Section 236NA makes provision about events which prevent a claim being made under this section and circumstances in which a claim is revoked.”
	Amendment 48,page563,line46, leave out
	“is treated as meeting that requirement”
	and insert
	“at any time is treated as meeting that requirement at that time”.
	Amendment 49,page564,line9, leave out
	“day of the disposal mentioned in section 236H(1)”
	and insert “time in question”.
	Amendment 50,page566,line10, at end insert—
	‘(A1) The limited participation requirement is met if Conditions A and B are met.”
	Amendment 51,page566,line11, leave out
	“The limited participation requirement is met if”
	and insert “Condition A is that”.
	Amendment 52,page566,line15, at end insert—
	‘(1A) Condition B is that the participator fraction does not exceed 2/5 at any time in the period beginning with that disposal and ending at the end of the tax year in which it occurs.”
	Amendment 53,page566,line18, after “(1)(b)” insert “and (1A)”
	Amendment 54,page567,line7, at end insert—
	“236NA No section 236H relief if disqualifying event in next tax year
	(1) This section applies where—
	(a) a disposal is made in circumstances where paragraphs (a) and (b) of section 236H(1) are satisfied, and
	(b) one or more disqualifying events occur in relation to the disposal in the tax year following the tax year in which the disposal occurs.
	(2) A “disqualifying event” occurs in relation to the disposal if and when—
	(a) C ceases to meet the trading requirement,
	(b) the settlement ceases to meet the all-employee benefit requirement,
	(c) the settlement ceases to meet the controlling interest requirement,
	(d) the participator fraction exceeds 2/5, or
	(e) the trustees act in a way which the trusts, as required by the all-employee benefit requirement, do not permit.
	(3) No claim for relief under section 236H may be made in respect of the disposal on or after the day on which the disqualifying event (or, if more than one, the first of them) occurs.
	(4) Any claim for relief under section 236H made in respect of the disposal before that day is revoked, and the chargeable gains and allowable losses of any person for any chargeable period are to be calculated as if that claim had never been made.
	(5) Such adjustments must be made in relation to any person, whether by the making of assessments or otherwise, as are required to give effect to subsection (4) (regardless of any limitation on the time within which any adjustment may be made).
	(6) Section 236H(4A) (restrictions on application of section 236L) applies for the purposes of subsection (2)(b).
	(7) Section 236N(2) applies for the purposes of subsection (2)(d) as it applies in relation to section 236N(1)(b) and (1A).”
	Amendment 55,page567,line11, after “occasion” insert
	“, after the end of the tax year following the tax year in which the acquisition occurs, when”.
	Amendment 56,page567, leave out lines 13 to 25 and insert—
	‘(2) A “disqualifying event” occurs in relation to the acquisition if and when—
	(a) C ceases to meet the trading requirement,
	(b) the settlement ceases to meet the all-employee benefit requirement,
	(c) the settlement ceases to meet the controlling interest requirement,
	(d) the participator fraction exceeds 2/5, or
	(e) the trustees act in a way which the trusts, as required by the all-employee benefit requirement, do not permit.”
	Amendment 57,page567,line26, leave out “after” and insert “before”.
	Amendment 58,page567,line34, leave out “(2)(b)(i)” and insert “(2)(b)”.
	Amendment 59,page567, leave out lines 44 to 48.
	Amendment 60,page568,line1, leave out
	“(2)(b)(ii) as it applies in relation to section 236N(1)(b)”
	and insert
	“(2)(b) as it applies in relation to section 236N(1)(b) and (1A)”.
	Amendment 61,page568,line36, at end insert—
	‘(7) Section 236PA makes provision about events which prevent a claim being made under this section and circumstances in which a claim is revoked.”
	Amendment 62,page568,line36, at end insert—
	“236PA No section 236P relief if disqualifying event in next tax year
	(1) This section applies where—
	(a) a deemed disposal arises in circumstances where paragraphs (a) to (c) of section 236P(1) are satisfied, and
	(b) one or more disqualifying events occur in relation to the disposal in the tax year following the tax year in which the deemed disposal arises.
	(2) No claim for relief under section 236P may be made in respect of the deemed disposal on or after the day on which the disqualifying event (or, if more than one, the first of them) occurs.
	(3) Any claim for relief under section 236P made in respect of the deemed disposal before that day is revoked, and the chargeable gains and allowable losses of any person for any chargeable period are to be calculated as if that claim had never been made.
	(4) Such adjustments must be made in relation to any person, whether by the making of assessments or otherwise, as are required to give effect to subsection (3) (regardless of any limitation on the time within which any adjustment may be made).
	(5) “Disqualifying event” is to be construed in accordance with subsections (2), (6) and (7) of section 236NA except that—
	(a) references in those subsections to the disposal are to be read as references to the deemed disposal, and
	(b) in applying sections 236I to 236O and 236R for this purpose—
	(i) references in those provisions to the settlement are to be read as references to the acquiring settlement (within the meaning of section 236P(1)), and
	(ii) references in those provisions to C are to be read as references to the company mentioned in section 236P(1)(b).”
	Amendment 63,page570,line17, leave out “The” and insert
	“Subject to paragraph 2A, the”.
	Amendment 64,page570,line18, at end insert—
	2A In relation to disposals made on or after 6 April 2014 but before 26 June 2014, TCGA 1992 has effect as if—
	(a) in section 236H— in section 236N—
	(i) in subsection (4)(b), for the words from “at the time of the disposal” to the end there were substituted “(see sections 236J to 236L)”,
	(ii) subsection (4)(c)(ii) (and the “and” before it) were omitted, and
	(iii) subsections (4A) and (7) were omitted,
	(iv) in subsection (A1), for “Conditions A and B are” there were substituted “Condition A is”, and
	(v) subsection (1A) were omitted,
	(b) section 236NA were omitted,
	(c) in section 236O—
	(i) in subsection (1) the words “, after the end of the tax year following the tax year in which the acquisition occurs, when” were omitted,
	(ii) for subsection (2) there were substituted—
	“(2) A “disqualifying event” occurs in relation to the acquisition if and when—
	(a) at any time after that tax year—
	(i) C ceases to meet the trading requirement, or(ii) the settlement ceases to meet the controlling interest requirement, or
	(b) at any time after the acquisition—
	(i) the settlement ceases to meet the all-employee benefit requirement,(ii) the participator fraction exceeds 2/5, or(iii) the trustees act in a way which the trusts, as required by the all-employee benefit requirement, do not permit.”,
	(iii) in subsection (3) for “before” there were substituted “after”,
	(d) section 236P(7) were omitted, and
	(e) section 236PA were omitted.”
	Amendment 65,page575,line36, leave out
	“day of the disposal mentioned in section 236H(1)”
	and insert “time in question”.
	Amendment 66,page582,line9, leave out
	“date of the disposal mentioned in section 236H(1)”
	and insert “time in question”—(Mr Gauke.)
	Third Reading

David Gauke: I beg to move, That the Bill be now read a Third time.
	I will keep my remarks brief, but I would like to remind the House once more of the important provisions before us. Finance Bill 2014 delivers measures that will help British businesses invest and create jobs, help British households work and save, and help to ensure that everyone in Britain pays their fair share of tax. The Bill builds on the strong foundations that we have secured in the past four years, safeguarding our economic stability, creating a fairer more efficient and simpler tax system, and driving through reforms to unleash the private sector enterprise and ambition that is critical to our recovery.
	Let me focus first on growth and competitiveness. When this Government took office, we inherited an economy in crisis. We have had to make some tough choices, but we have delivered our economic plan. As a result, the UK economy is finally getting back on track. The deficit is shrinking, employment is at record levels and the our economy grew faster than that of any other advanced economy over the past year. To support the recovery, it is vital that the UK tax system attracts investment to this country and does everything possible to ensure that UK businesses can compete in the global race. That is why, in the corporate tax road map in 2010, we set out our ambition to give the UK the most competitive tax regime in the G20.
	In my conversations with financial directors and tax advisers I am told again and again of the importance of a low headline rate and the signal it sends. I am proud to say that, as a result of this Government’s actions, the main rate of corporation tax will fall to 20% by 2015-16—not only significantly lower than the uncompetitive rate of 28% we inherited from Labour, but the lowest of any major economy in the world. It is vital for our national interest that we continue to have that low competitive rate. Altogether, by 2016, our corporation tax cuts for small and large businesses will be saving businesses £9.5 billion every year. These reforms have been a central plank of the Government’s economic strategy, and that strategy is working.
	Competitiveness is not just about the rate of corporation tax. That is why this Bill will raise the annual investment allowance to £500,000 with effect from April 2014 to December 2015. This doubles the amount of investment on which firms can get up-front tax relief. More than 4.9 million firms will benefit, the vast majority of which will be small and medium-sized enterprises.
	The Bill will also reduce business and household energy costs by freezing the carbon price support rate to £18 in 2016-17. The Government have also committed to maintain the freeze until the end of the decade, which will save businesses £4 billion by 2018-19. The Bill includes measures to give targeted support to the innovative sectors that will drive growth in the 21st century. We will legislate further to increase the generosity of the research and development tax relief for small businesses, with an increased rate of support for loss makers of 14.5%. This demonstrates the Government’s commitment to supporting research-intensive SMEs and start-ups and could support up to £1 billion of investment over the next five years. We will support social enterprise with a 30% tax relief, unlocking up to £500 million in additional investment over the next five years, and we are making permanent our successful seed enterprise investment scheme to support investment in start-ups and early-stage firms. Let me mention again the new theatre tax relief, which we have just debated, that recognises the unique cultural value that the theatre sector brings to the whole of the UK.
	With low corporation tax rates, support for innovation and help for small business, Finance Bill 2014 sends the clearest possible message that Britain is open to multinational companies, open to entrepreneurs, open to investors: Britain is open for business.
	Let me deal with fairness. While the Bill supports businesses, it also provides for individuals and helps families with the cost of living. We are delivering our
	coalition commitment to raise the income tax personal allowance to £10,000 and we are going further to increase it to £10,500 in 2015-16. By April 2015, a typical basic rate taxpayer will be more than £500 better off than under the previous Government’s plans. Taken with previous increases, the Government will have lifted over 3.2 million people out of income tax altogether. That is real help for hard-working people.
	The Finance Bill rewards those who want to save for the future. We recognise that people who rely on their savings income have seen low returns in recent years. From April 2015, the 10% starting rate of tax on savings will be abolished, and a 0% rate will be extended to the first £5,000 of savings income above the personal allowance. This will benefit 1.5 million people, over 1 million of whose total incomes will be below £15,500 a year. They will pay no tax on their savings income at all.
	We are delivering our promise to recognise marriage in the tax system by introducing a new transferable tax allowance for married couples and civil partners, allowing spouses in households where neither partner is a higher or additional rate taxpayer and where one partner has not used up the full allowance, to pay tax on up to £1,050 less of their income from 2015-16.
	Let me deal with some of the measures we are taking to tackle avoidance. The vast majority of individuals and businesses pay the tax that they owe, but there are some who continue to pursue unacceptable ways of reducing and delaying their tax bill. This Government are determined radically to reduce both the incentives and the opportunities for individuals and businesses to engage in abusive behaviour. This Government have taken unprecedented steps to tackle avoidance and abuse. Since 2010 we have legislated to close more than 40 tax avoidance loopholes, and we have made major strategic reforms such as introducing the United Kingdom’s first anti-abuse rule. As a result, the market for tax avoidance schemes is shrinking. The number of disclosures of tax avoidance schemes fell by nearly 50% between 2011-12 and 2012-13.
	However, we are not complacent. That is why the Bill introduces a new requirement for users of avoidance schemes which have already been struck down by the courts, which fall within the scope of the DOTAS rules, or which are being counteracted by the general anti-abuse rule to pay the disputed tax up front. That will generate nearly £5 billion of revenue over the next five years, and ensures that those who knowingly enter avoidance schemes will not be able to hold on to the disputed tax. They will have to pay up front like most other taxpayers. We are also cracking down on high-risk promoters of tax avoidance schemes by imposing minimum standards of behaviour, supported by onerous information powers and stiff penalties for those who do not comply. Those measures demonstrate the Government’s continued commitment to swift, effective and targeted action to tackle avoidance and aggressive tax planning.
	The Bill may be substantial, but it contains a number of provisions to clarify or simplify the tax system. It contains proposals to simplify the tax rules and administrative procedures for employee share schemes, and to merge the main and small-profits rates of corporation tax. Those changes will make it easier for small businesses to meet their tax obligations, and will give them greater certainty that their tax affairs are in order. The Bill also
	follows a longer, more thorough process of policy development. In December 2013 we published more than 300 pages in draft legislation for comment, and we received more than 300 responses, which have improved the final legislation.
	The Bill once again delivers on the Government’s commitment to unprecedented levels of consultation and scrutiny in the development of new tax proposals. It has also undergone 31 hours of scrutiny in the Public Bill Committee. Let me take this opportunity to thank and pay tribute to the Members on both sides of the House who served tirelessly on the Committee, as I did not have a chance to put all my thanks on record at the end of the Committee stage.
	I particularly thank the Whips: my hon. Friend the Member for Hastings and Rye (Amber Rudd) provided invaluable help, and I also thank the hon. Member for Scunthorpe (Nic Dakin). I thank my hon. Friend the Member for Gosport (Caroline Dinenage) for her assistance in ensuring that inspiration flowed readily. I thank the members of the Opposition Front-Bench team, who probed diligently. We did not necessarily agree, and Ministers certainly did not accede to any of their endless requests for reports and reviews, but they put their case in, for the most part, reasonable terms.
	I thank the hon. Members for Birmingham, Ladywood (Shabana Mahmood), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne North (Catherine McKinnell)—not forgetting, of course, the hon. Member for Nottingham East (Chris Leslie), who at least was there at the beginning and is here at the end. That is half the skill of dealing with a Finance Bill, as far as I can see.
	I thank the Financial Secretary to the Treasury and the Economic Secretary to the Treasury for their help in setting out the Government’s case. I also thank my hon. Friends on the Back Benches, whose contributions were generally both valuable and brief: I am grateful for that.
	I fear that my time is almost up, Mr Deputy Speaker, so I shall draw my remarks to a close. The 2014 Finance Bill rewards hard work, and restores our private sector’s competitiveness. It encourages investment, tackles avoidance, and helps those on low incomes. This is a Bill that takes difficult steps but delivers real change, and I commend it to the House.

Christopher Leslie: Now that we have reached the final stages of consideration of the Finance Bill, may I join the Minister in commending all hon. Members in all parts of the House who took part in the scrutiny, and in considering all the details? As he said, there were 31 hours of consideration of the Bill. I particularly pay tribute to my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson), for Newcastle upon Tyne North (Catherine McKinnell), and for Birmingham, Ladywood (Shabana Mahmood). Let us be honest: they did the heavy lifting in Committee and on Report, as did—in an equal but perhaps less audible way—my hon. Friend the Member for Scunthorpe (Nic Dakin), the Opposition Whip, who made sure we kept to time and that everything was pursued diligently. Many hon. Members, certainly from the Opposition side of the Chamber, pushed Ministers and probed on specific matters of policy, and I grant that Ministers tried to
	address many of those points, though they were ably assisted, I suspect, by the officials from the Treasury, who also put a lot of work into these Finance Bills.
	The Bill is long on clauses but short on ambition, I am afraid. I said on Second Reading that our goal was to try to improve the specifics. We have tried our best in a number of areas, but I fear we have not always succeeded in persuading Ministers to see the error of their ways. Let us consider some of these specifics, such as the crass and ill-timed tax cut for investment fund managers through the abolition of stamp duty reserve tax. At a time when so many people in this country are struggling with cuts to tax credits, such as the bedroom tax, and finding it difficult to make ends meet, the Government’s priority was to give that support and help first and foremost to those poor, hard-up investment fund managers. It is a badge of shame that that was their priority.

Ian Swales: Will the hon. Gentleman give way?

Christopher Leslie: I do not know whether the hon. Gentleman is an investment fund manager who has done well out of this, but I will give way and find out.

Ian Swales: The hon. Gentleman is repeating something we have discussed over and over again. Does he not understand that the money from the change in stamp duty goes to the investment funds, not the manager, and that, in fact, millions of ordinary people up and down the country benefit from this change?

Christopher Leslie: I am sure those investment fund managers have absolutely no interest in the abolition of SDRT in any way! I thought the hon. Gentleman was once a Liberal Democrat. Before the general election, the Liberal Democrats used to pretend they were in favour of standing up for the vast majority of people, against the vested interests in society who tend to look after their best interests, yet here he is again, voting for tax cuts for investment fund managers. This is a specific element of the Bill that we opposed. We tried to persuade the Government to drop that measure, but we were unsuccessful.

Mark Field: I feel I must stand up for investment fund managers, not least because their business brings significant amounts of money to the UK. I reiterate the sensible words of the hon. Member for Redcar (Ian Swales): ultimately it is all of us who are investors in such funds who will reap the benefits of ensuring that this business comes to these shores, rather than to many other globally competitive financial centres.

Christopher Leslie: The hon. Gentleman represents very many of those investment fund managers. He is doing the job he was sent to do, but this is a matter of priorities, and I have to say that the Opposition just disagree. The Treasury has finite resources at its disposal, and at a time of pressures, cuts, and rises in tax—through VAT and in other ways—that hit the least well-off in society, I just disagree with Ministers and Members on the Government Benches that this should have been the priority.
	There were other specific areas where we tried to persuade the Government to improve the Bill, such as the proposal to give shares to employees in exchange for employment rights. We believe that undermines what
	should be a healthy approach to employee share ownership, because it gives the sense that something is being taken away, and that there is a disadvantage. That point was voiced not just by Opposition Members, but by some Government Members. Again, however, we could not persuade the Government on that.
	So many tax loopholes need to be addressed, and the Finance Bill should have been the opportunity to tackle some of them, not least the notorious quoted eurobond exemption, which is costing taxpayers hundreds of millions of pounds. Ministers ought to have had the courage to take on that issue. Some of the Bill’s proposals for pensions flexibility are sensible, but big questions remain about the advice we will be able to give retirees to make sure that they get the guidance they need, at that most crucial point in their financial lives, to make the right choice, if they are not purchasing an annuity. Ministers have not lived up to the challenge of ensuring that that guidance and advice is possible. In the debate, I heard that that guidance may currently equate to 15 minutes of face-to-face advice—perhaps I should say face-to-faces advice, because the Minister with responsibility for pensions is now saying, “We will give you some guidance, but it might be as part of a group of people.” The Government have to improve the legislation in this area.
	The Bill contains a proposal for a married couples allowance. The Chief Secretary to the Treasury and, I suspect, the Chancellor personally disagree with it, but in a coalition they have to throw a bit of meat to the Back Benchers. The allowance discriminates between forms of partnership and does not help many married couples at all, as we see when we look at the total number who will benefit. If we have tax cuts to give, they should be given to as many people as possible.
	Of course, we also tried to improve the specifics and dissuade the Government from continuing their tax cut for millionaires—the reduction from 50p to 45p in tax on earnings of more than £150,000. Again, that is a sign of their priorities: they stand up for those who already have significant wealth in society, but do not respond to the needs and requirements of the least well-off.
	We tried our best to improve the Bill, but it missed a number of opportunities. Significant reforms should have been in it, but are conspicuous by their absence. Why did the Treasury not put the cost of living concerns front and centre in this legislation? I am not just talking about making sure that energy companies stop ripping off households up and down the country, or about passing on wholesale price reductions to ordinary households; the Bill should have contained, for example, steps towards a 10p starting rate of tax. There are a number of ways in which cost of living issues should have been far higher up in this legislation.

Jim Cunningham: The Conservative Government of the early 1970s recognised that there was a cost of living problem in this country, and they gave a cost of living payment, through the wage packet, to the low-paid in industries.

Christopher Leslie: One would have thought that by now Ministers would have twigged that for all the talk of growth and the recovery, their constituents, never mind ours, are not seeing the benefits in their daily lives. That
	should have been a focus in the Finance Bill. It should have focused more on housing, as we have a crisis in this country, whereby demand exceeds supply and we have the lowest level of house building since the 1920s. Yet Ministers seem intent on structuring a lopsided recovery in our housing market, failing to deliver the 200,000 properties a year we should be aiming towards by 2020. In addition, many tenants are being ripped off by lettings agencies in our private rented sector. We need reforms to deal with those sorts of things and the Budget ducked those issues, as did the Finance Bill.
	The Bill could have dealt with some of the exploitative zero-hours contracts. It should have contained measures to help small and medium-sized enterprises with business rates, because many firms in our constituencies are finding it difficult to get by. We should make sure that we help them, not just with business rates but by making sure that the banks do their job and provide credit. Those are the sorts of reforms that would make a big difference, but again, they were not in this Finance Bill.

Brooks Newmark: The hon. Gentleman should at least acknowledge that we dropped the small business rate by at least 1p, which has helped businesses. Will he guarantee before the House that he would not increase corporation tax should the country be unfortunate enough to see a Labour Government in power after 2015?

Christopher Leslie: That is already on the record. Our view is that the proposed change in corporation tax from next April—from 21p to 20p—should not proceed. That help, instead of going to 2% of companies, should go to 98% of businesses, including the small and medium-sized companies that are the backbone of our economy and that form the bedrock of enterprise in this country. Funnelling that resource through business rates is our preferred choice, but we will set out all our plans in a manifesto, as I suspect the Minister will do as well. We had a debate on this matter earlier, in which we focused on annual investment allowances—the capital allowances for businesses. As we all know, the Minister cut that allowance to a very small level straight after the general election, causing great chaos for very many businesses. Amazingly, it is going up again, in time, coincidently, for the next general election. He revealed in the small print today that it is a temporary change, so the allowance will presumably go back down again.

David Gauke: rose—

Christopher Leslie: I will give way to the Minister if he will tell us what that investment allowance will fall back down to in 2015. Will he tell us?

David Gauke: It is hardly in the small print. It was in the announcement that was made when we extended and increased the annual investment allowance until December 2015. After that, it is a rate of £25,000. That rate is in the public domain, and, presumably, it is the rate that the Opposition have as well.
	As the hon. Gentleman did not quite respond to the question from my hon. Friend the Member for Braintree (Mr Newmark), let me ask it again. The Labour party has given a heavy hint this week that it could increase corporation tax up to 26%, as that would still be the
	lowest rate in the G7—that is the test that it has set itself. Will he provide some reassurance today that a Labour Government would not increase corporation tax to 26%?

Christopher Leslie: We know the Minister’s game. He is again trying to scare firms and businesses with various suggestions on tax. We have made it very clear that we need to ensure that corporation tax levels remain at their most competitive among the G7. We will set out our tax plans in a manifesto, as the Minister will be required to do as well. If my hon. Friends think that VAT is due to stay at 20% under a Conservative Government, they should think again. I have heard that the Conservatives may wish to increase VAT to 21% or 22%. I will give way to the Minister if he can rule it out for us right now, here in the Chamber, that he does not have any plans to increase VAT in the next Parliament. Will he rule that out?

David Gauke: I will tell the hon. Gentleman what we can do: we can continue to reduce the deficit without increasing taxes. That is more than he can offer. Unlike his party, we have not given a heavy hint that the test based on the most competitive rate in the G7. Canada has a rate of 26.5%. If the Labour party imposed a rate of 26%, it raises the question of whether it would be complying with that commitment.

Christopher Leslie: Let the record show that the Conservative Minister did not rule out increasing VAT to above 20%. It is telling that he gave a heavy hint that that remains open as an option. We can have these discussions and examine these particular issues, but I am looking at the missed opportunities—the things that should have been in the Finance Bill. We are now on its Third Reading, and it is time that Ministers realised that people from across the country are crying out for significant changes and improvements that will affect their lives.
	I am thinking, for example, of the 5 million people in low pay and the incentives to deliver a living wage. That could have been part of the Finance Bill, but it is not. I am thinking of those families who are struggling with the high cost of child care, which is increasing at a rate higher than inflation. If only the Minister had designed his bank levy properly in the first place and collected the £2.5 billion that he promised the country, we could afford to move from 15 hours of free child care for working parents of three and four-year-olds to 25 hours. That is the sort of reform that could make a big and appreciable difference to the lives of working people up and down the country.

Jim Cunningham: Once again, it comes back to helping families with the cost of living. The Government cut Sure Start, nursery places and so on. Although they boast that they expanded that provision, they did not—they cut it, although we do not have the exact figures. The situation is exacerbated for a lot of families by the bedroom tax, which is forcing people into more expensive accommodation and thereby driving rents up. There is also a lack of social house building in this country.

Christopher Leslie: That is my point. The Press Gallery is not bursting at the seams because the Government do not want people to think about what could have been in the Finance Bill. That is not something they want to
	talk about. They want it to be a “steady as she goes” Finance Bill. They do not want to address the problems of the bedroom tax or to supply real help to the long-term unemployed through starter jobs to give them the opportunity to repair their CVs and get a foot on the ladder. Repeating the bankers bonus tax would have supplied the revenue for that. There are funded ways of doing those things; despite how Ministers seem to want to portray it, this is not about unfunded commitments or borrowing. There are clear, practical and well-costed ways of delivering real improvements to people’s lives, but Ministers refused to do them.
	Why are Ministers missing the opportunity offered by this Bill? As far as they are concerned, everything is fine with the economy. It is all going perfectly well. That is their view, but I am afraid that we disagree on that point. As far as Ministers are concerned everything is fine with living standards, but the OBR has said that people will be worse off in real wage terms in 2015 than they were in 2010. Ministers think that everything is fine in the welfare system, but they do not realise that the welfare bill is rising because they are not tackling the root causes of welfare inflation, such as rising rents, long-term unemployment and the subsidies required for low wages. Those are the sorts of challenges that should have been covered in the Finance Bill but are not.
	On the deficit and the national debt, Ministers think that everything is fine even though the past couple of months have seen the deficit rise. It is going in the wrong direction. They have added a third to the national debt, which is now at £1.2 trillion. If interest rates go up even by 25 basis points—0.25%—an extra £2 billion of public expenditure will be required to service the debt that they will be accumulating.
	Ministers think that everything is fine with productivity, yet infrastructure output is down by 10% compared with in 2010. They think that everything is fine in the housing market, yet we can see by the lopsided nature of what is happening in the economy that there are real risks that mortgage rates might well rise prematurely because of how they have failed to recognise the need to match demand and supply more effectively. They might be satisfied with the state of the economy, but we are not.

Jim Cunningham: It is interesting that my hon. Friend has mentioned interest rates, because, one way or another, they are bound to go up over the next 12 to 18 months. That will have a major effect on negative equity for people who have bought their houses, but, more importantly, it can affect small businesses that want to borrow money and are not getting much help from the banks at the moment. The Government spend half their time blaming a Labour Government for the mess that the banks created. They have never attacked the bankers, who made the economic situation worse, not better. They are apologising for the bankers and blaming us.

Christopher Leslie: Government Members and Ministers do not understand how important it is that we ensure that the recovery is sustained and sustainable. A premature rise in interest rates has considerable risks. Three quarters of credit and debt is floating, so if interest rates do rise prematurely, significant harm will come to many householders. Even a quarter point rise in interest rates
	will cost the typical householder £240 per year.
	[
	Interruption.
	]
	The hon. Member for Suffolk Coastal (Dr Coffey) may be relaxed, as the Chancellor is relaxed, about interest rates. The Chancellor says that he is not bothered—that he is relaxed about rising interest rates. Is the hon. Lady relaxed about rising interest rates? I will give way to her if she is.

Therese Coffey: All I will say is thank God we have not had a Labour Government for the past four years, because I expect that interest rates would now be at 10% and people would be handing back their keys and hoping that the hon. Gentleman does not get into power next year.

Christopher Leslie: I do not know what evidence the hon. Lady has for that spurious assertion.
	We will see what happens in the coming months. We will make sure that mortgage customers in the hon. Lady’s constituency know that the increases in interest rates are partly related to the condition of the housing market, which is causing significant risk. The Governor of the Bank of England is trying to deal with this very lopsided situation. Of course, it is a matter for him to decide on. Government Members need to speak to the Chancellor to get him to pull his finger out on the housing market and make sure that this is pursued correctly. They do not understand why it is important for the recovery to be fair for all—to be something that everybody in every part of the country benefits from. The richest 1% having been doing especially well in the past year.

David Gauke: The hon. Gentleman says that it is important that the whole country benefits from the recovery, and I entirely agree. Does he accept that three out of four new jobs created in the past year have been outside London?

Christopher Leslie: rose—

Lindsay Hoyle: Just to be helpful, there are three more speakers to come. The debate that is ping-ponging across the Chamber is very interesting, but I would like to hear from Back Benchers as well.

Christopher Leslie: You are completely right, Mr Deputy Speaker. We have had this debate going on throughout the day.
	The Minister is a Member of Parliament for Hertfordshire. If his constituents find work in London, under one set of statistics the jobs are classified as located in London, but under the set of statistics he prefers, they are located in Hertfordshire and not London. We can talk about the methodology used in relation to these things.
	Ultimately, this Finance Bill is not focused on the long-term best interests of this country. It is not a long-term Finance Bill for stability and for the vast majority of this country; it is a short-term Finance Bill from a part-time Chancellor who is more concerned about getting from here to election day than building a sustained recovery that is fair for all. The defining challenge of our times is to reconnect the wealth of our
	country with the ordinary finances of households up and down the country. I urge my hon. Friends to vote against the Finance Bill and to send this Bill and these Ministers back to the Treasury drawing board.

Mark Field: I am glad that I am looking more youthful and Conservative this afternoon, Mr Deputy Speaker.
	This is a very good Bill containing much that I agree with. The Minister has rightly pointed out that it does some important things, particularly on something close to my heart—the theatre industry in my own constituency—but also on technology, which is one of the big growth areas for the future prosperity of this country.
	I want to talk about an ongoing concern of mine. The Minister will be aware of what I am about to say. Barely a fortnight ago, Her Majesty’s Revenue and Customs began writing to some 5.5 million taxpayers to confess that it had got things wrong. Errors in the pay-as-you-earn calculation had led the taxman to charge some 2 million fellow citizens too much tax and a further 3.5 million Britons had been assessed too leniently. That latter group now faces the prospect of several years of repayments. All this is in spite of expensive IT and personnel reforms that were meant to improve the system’s accuracy.
	That news came at a time when the House was scrutinising this Finance Bill, which proposes bestowing ever more powers upon that organisation—in my view, an unjust reward for yet another year of error-strewn performance. Meanwhile, a consultation is now under way as to whether HMRC should be given direct access to UK citizens’ bank accounts so that it can claim from source any tax that it believes it is owed. I share the view of many people on the Government Benches who are concerned that this coalition Government are overseeing the transfer of very considerable powers to the state. I fear that a precedent will be set for a future Labour Government, which we all hope will not come any time soon. However, such a Government might well be minded to expand further the taxman’s remit.
	Will the Minister reconsider the new accelerated payments regime that is proposed in the Bill—other Members have spoken on that in the past couple of days—about which I raised my own concerns at Second Reading? It is vital that the Treasury considers carefully the impact of granting such powers to an organisation that, I am afraid, has proven itself time and again to have incorrectly calculated tax on a grand scale.

David Gauke: Since 1944, there has been an end-of-year reconciliation under the PAYE system, because not all the information necessary to calculate the PAYE amount is available to HMRC during the year. To some extent, the PAYE amount is a provisional one, which is corrected at the end of the year. Notifying people at the end of the year quickly is not the system failing; that is how the PAYE system operates. It is not errors; that is the system.

Mark Field: I do appreciate that, but the Minister will also appreciate that trust in many institutions, whether Government, banks or this House, has been at an all-time low in recent decades. If we are going to pass on more powers to such institutions we—

Mary Glindon: Will the hon. Gentleman give way?

Mark Field: If the hon. Lady will excuse me, I will make some progress, as there are other Members who want to speak.
	We are now looking at drawing tax avoidance measures so widely. It has been common practice for investors to err on the side of caution and sign up, as the Minister knows, to the HMRC’s own disclosure of tax avoidance schemes—DOTAS—register. Currently, if the UK tax authorities wish to challenge the legitimacy of a DOTAS-registered scheme in court, the taxpayer is permitted to hold on to the disputed tax while the case is being resolved. The Government believe that that incentivises scheme promoters to sit back and delay resolution, so they propose extending the accelerated payments measure to existing DOTAS-registered schemes. That will mean that disputed tax is paid up front to the HMRC, and will be returned if a scheme is subsequently found to be legitimate.
	I quite understand why the Minister has felt tempted to explore that route. There is, I understand, a desperate need for money to shore up the public finances, which are still far less rosy than any of us would wish, with a recovery that remains somewhat fragile. There is also, understandably and justifiably, a consciousness of the need to deal more quickly with the tens of thousands of outstanding mass-marketed avoidance cases that are currently clogging up the courts.
	However, there is also a vital issue of principle at stake. The Government have been celebrating and espousing their reverence for the eight-centuries-old principles set out in Magna Carta. It was that charter that established the supremacy of the law by dictating that no Englishman could be punished without first going through the proper legal process. That set in train a constitutional revolution that has seen billions across the globe having their rights expanded and protected against an all-powerful state.
	Yet at the same time, our Government are now overseeing the creation of a law that will permit HMRC to confiscate a citizen’s property before the courts have established who is legitimately entitled to it. The DOTAS register was a good idea. It was designed to promote openness and transparency in investors’ relations with the HMRC. It is now, in effect, introducing retrospective legislation, with DOTAS declaration being used as a stick with which to beat legitimate investors—those who had never planned on having the liquid assets to meet disputed liabilities.
	No doubt the Government—any Government—feel they can railroad those proposals through on a wave of popular demand for new measures to tackle tax avoidance, but although I agree that we have to clamp down on illegitimate tax avoidance, I worry about the potentially very wide-ranging consequences, including the fundamental undermining of the Government’s overarching aim to make Britain a place that is open for business. I support many of the underlying measures in the Bill that are focused on that aim, but this measure expands a profoundly anti-Conservative notion of retrospective legislation. The Minister and I have both been shadow Ministers; we know the number of Finance Bills proposed by the erstwhile Labour Administration in the latter half of the last decade that we expressed concern about because
	they contained precisely this type of anti-avoidance legislation with retrospective elements. We have to recognise that considerable hardship is imposed on many of those who are affected by such provisions.
	I addressed these issues in an article in The Daily Telegraph several months ago. I was and continue to be inundated with letters and e-mails from ordinary people across the country who are utterly dismayed that a Conservative-led Government would initiate such a change in law. Let me highlight some of their comments, so that the Minister is fully aware of the impact of the proposal. One correspondent advised me:
	“If this goes through, HMRC will be able to demand immediate and upfront payment of the money it says I owe as a result of their changing the law retrospectively—but without me even being able to present any arguments to the tax courts in my defence. If this were to happen I would need to lose my home in order to pay the bill. It is a monstrous injustice.”
	Another correspondent wrote:
	“If one was to listen to the Government, it could easily be believed that users of the structures declared under the DOTAS are malicious, super rich individuals, out to escape payment of their ‘fair share’, in contrast to ‘honest taxpayers’. I have been an employee of a company that provided a remuneration structure duly registered under the DOTAS.
	In the aftermath of the most severe economic crisis in generations, the IT industry, in which I work, got hit very hard. I have been subjected to rate cut after rate cut since 2009, and for me, nominal income is only going in one direction: down. Yet, if I listen to”
	the Government,
	“it sounds like complying with an ‘accelerated payment’ will be but a well-deserved inconvenience, forcing me maybe to sell one of my numerous yachts or…homes. I am shocked and appalled at the cynical discourse that consists of creating this false image. I personally feel deeply insulted…. I am not a rich person by any stretch of the imagination; my partner and I rent a one bedroom apartment, and we live modestly.”
	What is slightly depressing is that this sort of scrutiny has not really happened. I well understand why the Labour Opposition feel they do not want to stand up for those individuals affected by the accelerated payments regime. I ask the Minister once again in the implementation of the Bill to consider an exception in the case of existing DOTAS-registered schemes whose promoters have taken all reasonable measures to enable a dispute to be brought before the statutory appeals tribunal. I think there should also be a right to appeal against an accelerated payment on the ground that the money is not due, or that a follower notice or accelerated payment notice is not applicable.
	Although the Government say the legislation is not retrospective, as it does not change an underlying tax liability, it will in fact apply with retrospective effect over the past 10 years to anyone who currently has an open appeal or inquiry. In my view, if the provision is to come into effect, it should be applied only in cases involving tax planning carried out after Royal Assent to this Finance Bill.
	I am sorry if I sound a little churlish. The Minister is well aware, because we have discussed this privately as well as on the Floor of the House, that I think there is much that is good in the Bill, but it is right that these things are properly scrutinised and that scrutiny is ongoing. We are putting into place certain measures that I think set a potentially dangerous precedent and run counter to a principle that should be close to all our hearts: that the British tax system and the British economy
	should be open for business and open to the opportunities that we all want our constituents to benefit from as we move into a strong economic recovery in the years ahead.

Chris Evans: It is a pleasure to follow the hon. Member for Cities of London and Westminster (Mark Field), who always speaks with great expertise in his field. I served on the Bill Committee—I have not missed a Finance Bill Committee since I entered the House. On the first Committee on which I served in 2010 I was full of enthusiasm and, having listened to the Minister, I am still filled with that enthusiasm as he has negotiated a thousand different ways to say no. I pay tribute to all the Members who served on that Committee.
	As we approach the general election, the public are crying out for help to ease their burdens as the economy belatedly shows some green shoots of recovery. People around their kitchen tables wondering how they will pay their bills, those in the workplace who are worried about their job security, and those running a small business will judge the Bill on three tests—are taxes fair for my family and myself, do business taxes encourage growth and are they fair, and how will pensions reform—

Mel Stride: The hon. Gentleman mentions business taxes. The shadow Minister was repeatedly pressed to say whether business taxes might rise under the next Government. We know from what the Opposition have said that business taxes could rise to 26.5%, the level that they are at in Canada. Does the hon. Gentleman share my concern that that could be a major brake on business development in the future?

Chris Evans: Of course I share the hon. Gentleman’s concern. I shared the concern that the very first act in the very first Budget of this Government was to put VAT up to 20%, increasing the tax burden by 2.5% for businesses all over the country. That was not exactly pro-business, but I am not here to talk about what the Tory Government have done or not done.
	Let us deal with facts. Working people have seen their wages fall by £1,600 a year on average under this Government. Real wages will have fallen by 5.6% by the end of the Parliament. People feel worse off. On growth—the one test that the Tories said they would achieve—after three years of a flatlining economy, we see the economy growing by only 4.6%. The Chancellor does not talk about his forecast that the economy would grow by 9.2% in 2010. Our present rate of growth is far slower than that of America at 6.6% or Germany at 5.7%. GDP growth this year is still expected to be lower than the independent Office for Budget Responsibility forecast in 2010.
	On borrowing, on which the Conservatives attacked the Labour Government, the present Government promised to balance the books by 2015, but borrowing will be £75usb billion that year. Over this Parliament borrowing is forecast to be £190 billion more than planned at the time of the first spending review. National debt as a percentage of GDP is not forecast to start falling until 2016-17, breaking one of the Government’s own fiscal rules.
	All the headlines following the Budget were about pension reform. Yes, annuities need to be reformed, and I support increased flexibility for people in retirement and reform of the pension market so that people get a better deal. However, the Labour party has consistently called for reforms to the annuities market and a cap on pension fund charges over the past three years. The Government have failed to reform the private pensions market to stop people being ripped off and to create a system that savers can trust. The Government are failing to prevent savers from being ripped off by delaying bringing in a cap on charges. This is costing savers up to £230,000. The Government are failing to make tax relief on pensions fair, with 15% of all relief—£4 billion—going to the richest 1% of taxpayers.
	When we talk about the reform of pension markets and the ending of annuities, I believe we should set three tests. The first is the advice test. Is there robust advice for people providing for their retirement, with measures to prevent mis-selling? Forget the patronising “buy a Lamborghini”. I do not believe the people of Britain are so naïve as to go out and buy a Lamborghini. As a former financial adviser, I am talking about good advice. With the reform of the annuities market there will be new products—products that we have not thought of before, such as bonds, investment trusts and all sorts of vehicles that people can invest in. Those will be complicated and people will need advice, but that will not be achieved by 15 minutes of guidance, where advisers cannot sell.
	The second test is fairness. The new system must be fair, with those on middle and low incomes still being able to access products that give them the certainty they want in retirement. The billions we spend on pension tax relief must not benefit only those at the very top.
	The third test is cost. The Government should ensure that this does not result in extra costs to the state, either through social care or through pensioners falling back on means-tested benefits, such as housing benefit. The Treasury must publish an analysis of the risks it considers when costing this policy. I was deeply concerned when the Minister said this afternoon that this change, which is the biggest ever to the pensions market, is still to be worked out and that a consultation on advice is still running. For those facing this change, advice is vital.
	I talked for little short of half an hour yesterday on the other major change introduced in the Bill: exchanging employment rights for company shares. I will try to break it down into two fundamental arguments. First, if an employer has an employee they are suspicious of, why would they give them shares in the company? Equally, if a company wants to trade shares for rights, does that mean it trusts the employee? Will they be hard-working and industrious for that company? Secondly, if a company is going to dismiss an employee, why would it give them shares in the company anyway? Surely share save schemes should be used to reward employees for hard, industrious work, but that is not happening. We still need reform.
	We have talked about a report and analysis. Even though the statistics now show that after a 33-week consultation only five of the 200 companies that responded said that they were interested in taking up the scheme, the Government still say that it is far too early to even think about a report.
	As we bring to a conclusion our consideration of the Finance Bill, which I am sure all of us who served on
	the Bill Committee are excited about, the one question we have to ask ourselves is this: is it fair to the people of Britain? Based on the statistics, it is not. I will therefore be joining my colleagues in the Lobby tonight and voting against the Bill.

Brooks Newmark: It is always a privilege to follow the hon. Member for Islwyn (Chris Evans). I want to focus on one small aspect of the Bill, new clause 10, which I know Opposition Members hold dear to their hearts. A couple of years ago the Government extended the £25,000 rate tenfold to £250,000. I told the Chancellor that that was going down extremely well with small businesses and asked whether there was any chance that we could extend it a little longer. He said, “I can do better than that; I’ll double it again, to £500,000.” That takes in pretty much 99% of companies, which is a good thing.
	For some reason, Labour wanted to enshrine in law the need to review the impact of the annual investment allowance, which I find peculiar. I do not think it is necessary at all. Governments review every year what is going on and whether tax cuts or increases work. I see no need to introduce that requirement into law.
	However, I thought that it might be helpful for Opposition Members if I offered a quick review of what we have done for business. I have come up with 10 points. First, we have lowered corporation tax. Secondly, we have cut the business rate by extending the small business rate relief scheme. Thirdly, we have brought in electronic invoicing. Fourthly, we have raised the threshold for the enterprise investment scheme. Fifthly, we have introduced the seed enterprise investment scheme, helping small businesses get a kick start. Sixthly, we have brought in the employment allowance, saving businesses £2,000. Seventhly, we have cut national insurance contributions for under-21-year-olds, saving businesses £500 per young person they employ. Eighthly, we have introduced the Small Business, Enterprise and Employment Bill. Ninthly, we have frozen fuel duty, making it cheaper for people to go back and forth to work. Finally, we have improved the research and development relief for businesses. We have done a lot for businesses.
	What has the impact been on businesses? The confidence index is at an all-time high. We have rebalanced the economy, with growth of 3% in construction, services and manufacturing. We do not need to enshrine in law the need to review the impact of the investment allowance on business, because actions speak louder than words. The Government’s long-term economic plan is working and Britain is back in business.
	Debate interrupted (Programme Order, 1 July).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.
	The House divided:
	Ayes 289, Noes 228.

Question accordingly agreed to.
	Bill read the Third time and passed.

Business without Debate

DELEGATED LEGISLATION

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Housing

That the draft Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014, which was laid before this House on 5 June, be approved.—(Mark Lancaster.)
	Question agreed to.
	Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft Openness of Local Government Bodies Regulations 2014, which were laid before this House on 3 April 2014, in the last Session of Parliament, be approved.—(Mark Lancaster.)
	Question agreed to.
	Motion made, and Question put forthwith (Standing Order No. 118(6)),

Defence

That the draft Armed Forces Act (Continuation) Order 2014, which was laid before this House on 13 May 2014, in the last Session of Parliament, be approved.—(Mark Lancaster.)
	Question agreed to.
	Motion made, and Question put forthwith (Standing Order No. 118(6)),

Legal Aid and Advice

That the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2014, which was laid before this House on 31 March 2014, in the last Session of Parliament, be approved.—(Mark Lancaster.)
	The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 9 July (Standing Order No. 41A).
	Motion made, and Question put forthwith (Standing Order No. 118(6)),

International Immunities and Privileges

That the draft African Legal Support Facility (Legal Capacities) Order 2014, which was laid before this House on 6 May 2014, in the last Session of Parliament, be approved.—(Mark Lancaster.)
	Question put and agreed to.

Electoral Commission (Motion)

Ordered,
	That the Motion in the name of Mr Andrew Lansley relating to the Electoral Commission shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.—(Mark Lancaster.)

PETITIONS

Bus Services for Beacon Heights (Walsall)

Valerie Vaz: The petition is from the residents of Beacon Heights park homes. A petition in similar terms has been signed by 65 people.
	The petition states:
	The Petition of a resident of Beacon Heights Park Homes Park,
	Declares that following the removal of the 934 and 936 bus services from Beacon Road, Walsall after 7pm and on Sundays many elderly people who do not drive cannot access public transport at those times and further that the Petitioner calls for a bus service or minibus to be introduced to replace the 934 and 936 bus service.
	The Petitioner therefore requests that the House of Commons urges the Government to take all possible steps to encourage Walsall Metropolitan Borough Council to consider the objections of the local residents.
	And the Petitioners remain, etc.
	[P001363]

Mr Speaker: It is a splendid thing when somebody who introduces a petition has a brother behind her in support.

NHS Service Provision in Middlesbrough South and East Cleveland

Tom Blenkinsop: The petition states:
	The Petition of residents of the United Kingdom,
	Declares that the Petitioners object to the closure of the Park End Clinic, Skelton Medical Centre, and Skelton NHS walk-in centre; further that the Petitioners object to the proposed closure of minor injuries units at East Cleveland and Guisborough Hospitals; further that the Petitioners are concerned these reductions in provision of primary care services will increase demand on the Accident and Emergency Department at James Cook University Hospital; further that the Petitioners believe that Ministers in the Department of Health should meet with the honourable Member for Middlesbrough South and East Cleveland to discuss these closures, and regret that Ministers have not committed to such a meeting.
	The Petitioners therefore request that the House of Commons urges Ministers to meet with the honourable Member for Middlesbrough South and East Cleveland to discuss these changes in service provision, and encourages NHS England and the South Tees NHS Clinical Commissioning Group to abandon these closures.
	And the Petitioners remain, etc.
	[P001364]

NIGERIA (ABDUCTED GIRLS)

Motion made, and Question proposed, That this House do now adjourn.—(Mark Lancaster.)

Gordon Brown: I am grateful to you, Mr Speaker, for permitting me to raise the desperate and continuing plight of more than 200 Nigerian girls who were abducted from school on 14 April and have been held in captivity for the past 80 days, with no sign of their imminent release. These wholly innocent young girls—Lugwa Abuga, Rhoda John, Comfort Amos, Maryamu Yakubu and 200 others—are now incarcerated in the forest areas of Borno state. Some have perhaps been dispersed across three other countries: Niger, Cameroon and Chad. Their physical and mental health is a worry for everyone.
	We now know that the girls were kidnapped by the terrorist group, Boko Haram, whose name in Hausa means “western education is a sin”. They are being held hostage simply because they wanted an education. Their only crime in the eyes of Boko Haram is that they wanted to be at school. Eleven weeks in captivity will seem like an eternity for young, once-optimistic 14, 15 and 16-year-old girls, whose future was all ahead of them until that day.
	I am sure that everybody in the Chamber would accept that such an outrage is every parent’s nightmare: your child leaves home and goes to school, but never comes home again; you wake up every morning not knowing whether your child is dead or alive, and spend every waking hour of the day not knowing whether your child is being molested, raped, trafficked or sold into slavery; and you have the terrible truth brought home to you that schools are no longer safe havens for your children, but theatres of war.
	Boko Haram’s perversion of its faith is so profound that it is apparently unperturbed by practising violence against young girls, even rape that causes unwanted pregnancies—damage to young girls that will endure and be lifelong, and that cannot be wished away even if they are returned safely to their homes.
	As we heard only a few minutes ago, in a Committee Room of the House of Commons, from Ngozi Okonjo-Iweala, Finance Minister and Co-ordinating Minister of the Economy—my grateful thanks to you, Mr Speaker, for chairing the event—across the country, tragedy is being piled on tragedy. There has been series of attacks: a wave of bombings in Borno state yesterday; an explosion in a shopping mall in Abuja last week, which killed 24 people; a medical college raid last week in Kano, killing eight; a hotel bombing in Bauchi city, killing 10; and attacks on four churches, killing 24. Residents of remote villages in northern Nigeria are fearful of night raids and running short of food and supplies. They are fleeing to the mountain caves, or to bigger towns. With more than 1,000 reported abductions in the past year alone, and more than 5,000 deaths at the hands of Boko Haram in the past five years, the governor of Borno state, who has courageously spoken out, is warning that failure to help his embattled schools and families will spell disaster for the rule of law in the whole of Nigeria.
	The 200 girls, whose faces and names are now known to the world, thanks to the efforts of the brave chairman of the Chibok community council, are not the only
	victims. There is another, less obvious, set of victims: the thousands of girls, and many boys, who can no longer go to school. Schools are closed in many parts of Borno state, and teachers are in fear of their lives. Education International, the global teachers’ union, which is well organised and engaged with this problem, has reported in the past few years on the murder of 171 teachers who were shot, usually in their own home and in front of their families, who were then kidnapped by gunmen. Their crime was to dare to teach girls at all. We therefore have another emergency in Nigeria: education in Borno state is coming to a standstill for fear of terrorists, and that demands an international and domestic response.
	In the days immediately after the abduction, I and many others tried to secure international attention and the widest possible global support for the Nigerian girls. A month ago, an enormous wave of concern was expressed in every capital of the world. There was, as we know, a period of intense publicity, and a worldwide campaign to bring back our girls secured 1 million supporters, but once again the attention span of the world has proved limited, and interest has ebbed. Even when it was reported last week that another 90 children—60 girls and 30 boys—had been kidnapped, there was only a flicker of attention across the world.
	Following the speech by Finance Minister Ngozi Okonjo-Iweala this evening, I wanted a debate before the summer recess—thanks to you it has happened, Mr Speaker—because it is time to wake up fully not just to the horror of what is happening, but to the ramifications for children, Nigeria and that part of Africa if nothing is done. A few terrorists can never be allowed at any time to blackmail a whole nation. We must do more to help the Nigerian Government back up the endeavours of President Goodluck Jonathan to secure the rescue of the girls and make inroads into the advances made by the terrorists.
	I am here to thank the Government for what they have done so far, and for their moral, physical and military support to the Nigerian people. I know that the President of Nigeria wishes to give thanks for the offers of support from China, the United States, France and Israel, as well as Britain. I have met the President on three occasions recently, and he has sent an additional 5,000 troops to the Borno state and is ready to do more. As a result of his pleas to the international community, Nigeria, Benin, Cameroon, Chad, Niger, Britain and the US have already established an external intelligence response unit to share security information. While it is right to recognise that there has been a great deal of international support, it is also right to acknowledge that in its hour of need, Nigeria requires more helicopter support, more aircraft cover, and more surveillance equipment. I believe that we should also support President Jonathan’s call for a better co-ordinated system for sharing intelligence across borders, and for, if necessary, the use of special forces and law enforcement agencies to help Nigeria confront terrorism.

Jim Shannon: I sought the right hon. Gentleman’s permission to intervene, and I thank him for bringing this matter to the House. The House is filled with Members who are equally concerned about this issue, and on behalf of the Church groups and my
	constituents, I want to share the right hon. Gentleman’s concerns publicly in the Chamber today. There has been an unwillingness, or perhaps the Nigerian Government have been unable, to respond in the way that we back home think they should. Is that because they are unable to seek the covert assistance that they need in order to ascertain where the schoolchildren are and bring them back? Does he feel that perhaps the covert assistant that this Government could offer is one way forward?

Gordon Brown: I am grateful for the support of the Churches in the hon. Gentleman’s constituency and elsewhere. Support from around the world is giving succour and confidence to the Nigerian people. I met schoolchildren who have been writing letters to the Nigerian President in support of Nigeria’s efforts to try to capture the terrorists and release the girls. He is absolutely right that there is a real problem. If the girls have been dispersed to a number of different places, a rescue mission for one group would immediately put the other groups at risk. That is the dilemma that confronts the Nigerian Government, as I understand it. That is why they need additional support to monitor what is happening and, if it is necessary to intervene, the troops, security services and the air cover to do so.
	There is a second thing that we can do to help. We cannot have safe schools if we do not have safe communities. In addition to the rising military and security presence in these towns, we need to allocate extra resources to reassure parents, teachers and children that they can go to school. The safe schools initiative, launched this afternoon in Britain by Finance Minister Ngozi Okonjo-Iweala, is a plan to rebuild the burnt-out schools that have been the casualties of terrorist incursions, starting with the Chibok school. Our promise must be that it will be rebuilt immediately and made safe, so that when the girls are returned to their homes, their school at Chibok is safe for them to learn in without fear. The worry for many in northern Nigeria is that their school will be the next to face a terrorist raid.

Tom Clarke: I am very grateful to my right hon. Friend for securing such an excellent debate. Does he agree that in the north some of the problems arise from illiteracy, from the fact that people cannot find jobs, and from extreme poverty? Sadly, this is encouraging some people to move towards religious fundamentalism.

Gordon Brown: I am grateful to my right hon. Friend. He has a very honourable record in fighting for the causes of poor people in Africa, Asia and every part of the world, and I want to acknowledge the work that he has done over many years. He is absolutely right. Ngozi, the Finance Minister, referred to that point only a few minutes ago. The Government of Nigeria have to do more—she says they will do more—to help young unemployed people to get work, and to enable young ambitious girls and boys to complete their education by having safe schools, and universities and colleges, to go to.
	The whole world should help Nigeria in this emergency. It has to make its schools safer, so that there is confidence among pupils and families that children can go to school. That may mean better perimeter fencing, walls,
	lighting, and communication and security systems to keep people in touch. We have to reassure people that everything possible is being done, otherwise we will give a propaganda advantage to the terrorists.
	The Safe Schools fund has already attracted $10 million from the Nigerian Government, $10 million from the business community, £1 million from the UK and $1.5 million from Norway. Money is coming from other countries in the EU, and there are promises from the United States of America. I hope that one outcome of the debate will be to convince the Government that it is worth providing more than £1 million. Without this initiative, many of the other measures in which we are engaged to help education in Nigeria cannot be successful.
	The United Nations has just passed a Security Council resolution that says that schools should have the same legal protection in conflict areas as hospitals. The Global Coalition to Protect Education from Attack is calling on each nation to introduce and integrate guidelines into their military manuals’ rules of engagement and operational orders, so that schools have the chance of being safe havens, rather than being militarised. I hope the Government can encourage every Administration in Africa to do that.
	As we heard this evening from Ngozi, and in speeches by the Secretary of State for International Development, the deputy leader of the Labour party and the Chair of the Select Committee on International Development, the kidnaps are part of a wider problem. In the last few weeks alone, we have seen reports of young girls raped and then murdered in India, and we have seen public outrage at the death sentence passed on a young Sudanese mother simply because a woman is considered to have no right to choose her own religion. Attention is now moving to Iraq, where extreme Islamists are fighting for demands that include changing the Iraqi constitution to legalise marriage for girls at the age of eight. This week and every week, around 200,000 school-age girls—some only 10, 11 or 12—are married off against their will because they have no rights that properly protect them. For many, child marriage will be preceded by genital mutilation—still to be successfully outlawed in many African countries.
	A total of 7 million school-age children as young as eight or nine will be in full-time work, some of it slave labour in fields and in domestic service, and many will be trafficked into prostitution as part of a subterranean world of international trade in girl slave labour when they should be at school. As a result, 32 million school-age girls are not going to school today, or any other day. The basic right to be in education is denied to 500 million girls who will never complete their education.
	Thus the abductions, the killings, the rapes, the mutilations, the trafficking, the exclusion from opportunity and the kidnaps are not isolated incidents, but part of a pattern whereby girls’ rights are not taken seriously enough in many countries, or indeed by the international community as a whole. The violation of girls’ rights is commonplace. In the end, in some countries, rights are only what the rulers decree, so that the opportunities for girls are no more than what a few patriarchs are prepared to bestow. Seventy years after the universal declaration of human rights, we are, in my view, in the midst of what I see as a great global civil rights struggle—a
	liberation struggle that has yet to establish, in every country of the world, every girl’s right to life, education and dignity. It is falling to girls themselves to lead the fight for rights, largely because of the failure of us as adults, who should be discharging our responsibility for and to them.
	A few days ago, there was a youth takeover of the African Union in Addis Ababa; then 20 parliamentary takeovers by young people who occupied, with the permission of the parliamentarians, national assemblies in support of Chibok girls. This was backed up by demonstrations in cities across the world, including in Rio, Lagos, Hanoi, Cairo and Islamabad. These young people still need the world to see their problem and their fight for what it is.
	The bigger truth is that for years we have somehow assumed a clear, if often rocky, pathway towards human rights and universal education, but today in Pakistan the Council of Islamic Ideology is calling for all age limits on girl brides to be abolished; India has just passed up on yet another chance to outlaw child labour; countries all across Africa are failing to act on genital mutilation; and progress to get 58 million out-of-school children into school has stalled in recent years. We should not and must not stand by as many countries in the world lurch backwards when it comes to the imposition, preservation and upholding of girls’ rights.
	In northern Nigeria today, we have on the one side terrorists, murderers, rapists and cowards hellbent on acts of depravity, and on the other side we have the defiant, relentless, brave beyond comprehension young people who are desperately fighting for a future but are too often oblivious to our attention. We must be clear that in the battle between the girls of the world and the backward-looking extremists, there will, in the end, be only one winner, but we should not have to wait another half-century with millions of lives ruined, millions of dreams destroyed, millions of hopes and aspirations crushed, for the world to deliver—as we must for the Nigerian girls, and for girls everywhere—the opportunities that should be and are every girl’s birthright.

Hugo Swire: I am most grateful to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) for securing this evening’s important debate, which unites the House. I would like to take the opportunity to praise the right hon. Gentleman’s ongoing work as UN Special Envoy for Global Education to promote the vital importance of education. I pay tribute to the determination he has shown in helping Nigeria face the scourge of gender-based violence and terrorism. I am aware of the meeting that he had earlier—chaired by you, I believe, Mr Speaker—with the Nigerian Finance Minister, Ngozi Okonjo-Iweala, and my right hon. Friend the Secretary of State for International Development, among others.
	I know that Members on both sides of the House will join me in utterly condemning the actions of Boko Haram. Its members prey on, and deliberately target, the weak, the innocent and the vulnerable. They have no regard for religion, ethnicity, gender or human life, and, as we have just heard, they are bringing untold misery to Nigerians and people throughout the region. The
	appalling Chibok abductions may have focused the attention of the world on Boko Haram’s activities, but that is, alas, just one example of the death and devastation that it is inflicting on northern Nigeria. It is 79 days since the abductions—79 days, and 219 schoolgirls are still missing; 79 days during which at least another 200 people, women, girls, boys and young men, have been abducted.
	I commend the right hon. Member for Kirkcaldy and Cowdenbeath for his important work in spearheading the safe schools initiative, which was designed to protect children at school. In recognition of the vital work that it will undertake, and of the potential that education has to transform Nigeria and the lives of individual children, my right hon. Friend the Prime Minster announced on 17 May that the United Kingdom would contribute £1 million of support directly to the initiative. That will be in addition to existing commitments to support education throughout Nigeria.
	As my right hon. Friend the Foreign Secretary said at the 12 June London Ministerial on security in Nigeria,
	“We want to make sure that Boko Haram does not succeed in its twisted mission to deny education to girls.”
	So—in addition to our support for the safe schools initiative, and in the first partnership of its kind in Nigeria—the Department for International Development and USAID will work to share resources and experiences to provide safe places in which children can learn. As a result, an additional 1 million children will receive a better education in northern Nigeria by 2020, and more than half of those children will be girls. During the current financial year, DFID will spend approximately £20 million on education projects in Nigeria. That is a signal of our determination to demonstrate that education is a right, not a privilege, and that it should be free from the fear of terrorism and abduction. Overall, we have seen a dramatic increase in DFID’s investment in education as a result of the steps that we have taken to meet our commitment of 0.7% of gross national income to international development.
	The search for the schoolgirls—led by the Nigerian Government, but supported by the international community—continues. British experts are working in Nigeria alongside others from the United States, France, Canada and elsewhere to analyse and process the available intelligence and supply advice to the Nigerian authorities. We have provided, and will continue to provide, surveillance support. The resolve of the United Kingdom and the international community to continue the search and reunite the girls with their families remains unwavering. However, to ensure that the tragedy of Chibok cannot be repeated, we must end the scourge of Boko Haram.
	Last week Abuja was shaken by another bomb attack, the third in as many months. More than 200 died in an attack in Jos on 20 May. A suicide bomber attacked a university in Kano on 23 June. Even those watching the World cup in public have been callously targeted and killed. Meanwhile, the murderous reported Boko Haram attacks in the north-east of Nigeria continue. The latest occurred yesterday: a car bomb attack in Maiduguri. More than 2,000 people are believed to have died at the hands of Boko Haram or others connected to them since the beginning of this year, including 59 boys who were murdered at the federal government college in February, when militants blocked the exits of a boys’
	dormitory, set it on fire, and killed the boys who tried to escape the flames. Those left inside were burned alive.
	The international community has mobilised to help Nigeria face this threat. Last week the UN listed Boko Haram leader Abubakar Shekau and the terrorist organisation Ansaru on the al-Qaeda sanctions list. This followed the listing of Boko Haram on 22 May. It is now an offence for any individual or entity to provide financial or material support to Ansaru, Shekau or Boko Haram, including the provision of arms or recruits.
	These latest listings were among a series of commitments made at the London ministerial to strengthen regional and international co-ordination, and reaffirm our commitment to the fight against Boko Haram. Nigeria and her neighbours Chad, Cameroon, Benin and Niger participated, with the US, France, Canada, the EU, and our international partners the UN and the African Union. Given the Chibok abductions, it was fitting that this ministerial was held in the margins of the summit to end sexual violence in conflict.
	Nigeria and her neighbours agreed to establish a regional intelligence fusion unit to share and process intelligence. Chad, Cameroon, Nigeria and Niger will each contribute a battalion to the multinational joint taskforce and increase the frequency of simultaneous or co-ordinated border patrols. The UK, the US and France will between them provide support to the regional intelligence-sharing arrangement and training for the taskforce battalions, and we, the participants at the ministerial, were united in our agreement that any effective response must be fully in accordance with human rights.
	British commitments, in addition to the pledge to bring a million more boys and girls into basic education in northern Nigeria by 2020 that I mentioned a few moments ago, include: significantly expanding our training and assistance to the Nigerian armed forces, particularly helping to train those units deployed on counter-insurgency operations, to strengthen their capacity to tackle Boko Haram; and support for the Nigerian presidential initiative for the north-east—PINE—supporting development and prosperity, including the provision of basic services and infrastructure to those communities most at risk.
	I am sure the right hon. Gentleman, and indeed the whole House, will agree with me that the UK should be proud of its contribution to the fight against Boko Haram and in standing alongside Nigeria in the face of extremism and mindless violence. Our commitment, and that of the international community, to defeating Boko Haram, to ending the scourge of terrorism in Nigeria, to securing the safe return of the missing schoolgirls, to preventing sexual violence in conflict, and to the empowerment and education of women and girls was underlined last month at the ministerial meeting here in London.
	In the wake of the heinous abduction of the Chibok schoolgirls, I am pleased that the countries of the region have all endorsed the ending sexual violence in conflict declaration. It underlines the importance of eliminating this horrific practice around the world, and the right hon. Gentleman will no doubt be supportive of the Prime Minister’s initiative to host a girls summit later this month. This will seek global commitment on
	issues the right hon. Gentleman raised in his speech this evening, such as early forced marriage and female genital mutilation.
	I am most grateful to the right hon. Gentleman for keeping this issue very much in the thoughts of everyone in this House. I have discovered in my role as a Foreign
	Office Minister that events overtake events and it is too easy to forget those that matter. This is one that most surely does.
	Question put and agreed to.
	House adjourned.